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Post Office – profits slide by 28%

Published on 20/02/2019

Portugal’s Post Office company, CTT, has reported profits below €20 million for 2018 and has cut the dividend by 7’%.

The 28% slide in profits is blamed on the costs of restructuring.

“The reported net result of €19.6 million was influenced by €20.7 million paid for the termination of employment contracts, mainly as part of the Operational Transformation Plan,” the company said in a statement sent to the stock market regulator.

CTT says that its profit before tax and interest was up 0.6% to €90.4 million, due to the performance of its parcels business, with revenues growing 1.4% to €708 million. The mail business grew 0.8% during the year, with a slowdown in volume.

The Executive President of CTT, Francisco Lacerda, attempted to put a positive spin on the accounts, “The 2018 results show that CTT’s diversification strategy is succeeding, with Expresso & Encomendas and Banco CTT performing very well and compensating for the structural fall in traditional mail traffic.”

Despite this, profits have shrunk, forcing CTT to review its dividend policy, “In line with the announced dividend policy, the Board of Directors will propose a dividend of €0.10 per share for the year 2018,” a cut of 73.6% against 38 cents paid last year.

Even with this reduction in dividend, the company will be delivering €15 million to shareholders – 75% of the profit made last year.