Portugal’s Post Office continues its downward spiral with its share price reflecting a 65% fall in half-year profits.
The company, led by Francisco Lacerda, has earned just €6.3 million in six months.
During the same period, gross profits stood at €46 million, a 12.4% reduction impacted by CTT’s financial services performance.
The Board blames the company's overall performance on 'non-recurring costs,' including €13.2 million in compensation paid to exiting employees, part of the restructuring plan presented in December last year.
Operating income, on the other hand, rose slightly by 0.9% to €355 million as a result of the growth in the Expresso & Encomendas, Banco CTT and Postal business units.
Revenues from the Postal business, accounting for 76% of the group's total revenues, rose 0.3% in the first half to €270 million, reversing the "trend of the last quarters."
The Express and Encomendas business saw revenue increase from 17.7% to €74 million and the financial services business recorded the largest drop, down 31.7% to €20 million.
This 31.7% collapse in the first six months of 2018 is due to public debt savings products that were replaced last October by even lower-income products, "which has affected the attractiveness of these products."
Now operating in 212 branches, Banco CTT, reached €10.8 million in the first half of 2018, an increase of 23.3% over the same period of the previous year and now has 350,000 customers, with "around 285,000 deposits accounts."
Despite some increased turnover, operating expenses also increased, by 5.8% to €324 million as a result of, "the increase in variable expenses associated with the growth of Expresso and Encomendas traffic in Portugal and Spain," explained the Board’s summary.
At the end of June, the total number of CTT workers was 12,599, down 312 from the same period in 2017. In addition, there was a decrease of 417 staff and an increase of 105 people 'on contract' yet ‘Personnel expenses’ increased by 5.1% to €183.2 million.
The CTT share price was down again, ending at just over €3, bad news for those who bought into the company when it was floated.
The sale of CTT, pushed through by the Pedro Passos Coelho government, yielded over €900 million to the Treasury and was achieved in two stages: in December 2013, the State sold 70% of the company's shares at €5.52 a share, and in September 2014, sold 30% at €7.25 per share.
Francisco Lacerda and his board have overseen a dramatic collapse in shareholder value yet remain at their desks to continue with their much vaunted recovery plan.
