CTT-CORREIOS DE PORTUGAL, S.A. Consolidated Results
January-September 2019
TABLE OF CONTENTS
HIGHLIGHTS ................................................................................................................................................... | 4 | |
1. | OPERATIONAL AND FINANCIAL PERFORMANCE OF THE BUSINESS UNITS ................................................. | 5 |
2. | OTHER HIGHLIGHTS ............................................................................................................................ | 14 |
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ..................................................................... | 19 |
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CTT - CORREIOS DE PORTUGAL, S.A. - PUBLIC COMPANY ("COMPANY")
JANUARY TO SEPTEMBER CONSOLIDATED RESULTS
- Revenues strongly grow by 8.8% in the 3rd quarter of 2019, as all business units grew, especially Banco CTT after the integration of 321 Crédito. In the 9 months of 2019 revenues reached €539.6m (+€14.7m, +2.8% year-on-year) with emphasis on Banco CTT 1 (+€18.1m), Financial Services1 (+€5.7m) and Express & Parcels (+€1.4m) which offset the decline of Mail & Other (-€10.4m).
- EBITDA2 accelerated its growth to 41.7% in the 3rd quarter of 2019, or 17.7% excluding the acquisition of 321 Crédito. In the 9 months of 2019 it achieved €73.3m, a year-on-year increase of €8.2m, or +12.7%. This evolution is due to organic and inorganic growth of Banco CTT (+€9.4m) and Financial Services (+€7.0m) which offset the declines of Mail & Other (-€4.3m) and Express & Parcels (-€3.8m).
- The decline of addressed mail volumes was -9.5% in the 9 months of 2019 vs the same period of the previous year, an improvement vs 1H19 (-10.3%). The positive evolution is due to a less sharp decline of -7.6% in 3Q19.
- Operating costs2 amounted to €466.3m (+€6.5m, +1.4% year-on-year), mostly as a result of increased direct and regulatory costs. Excluding 321 Crédito, operating costs increased €1.8m (+0.4%).
- Operating cash flow amounts to €23.7m in the 9 months of 2019.
- Net profit 3 grows to €22.9m (+€11.4m, +99.7%year-on-year), mainly reflecting the operating improvement, including the net contribution of 321 Crédito to the consolidation (+€4.3m), the extraordinary effect of the corporate income tax (IRC) refund related to the deduction of the tax loss on the sale of Tourline byCTTExpressoin2016(+€6.8m),andthelowerimpactofspecificitems (-€4.5m), which more than offset the increase in impairments and provisions (+€3.5m).
Consolidated Results
€ million | ||||||
3Q18 | 3Q19 | ∆ % | 9M18 | 9M19 | ∆ % | |
Restated | 19/18 | Restated | 19/18 | |||
Revenues | 169,7 | 184,6 | 8,8% | 524,8 | 539,6 | 2,8% |
Mail & Other | 118,4 | 119,0 | 0,5% | 372,5 | 362,0 | -2,8% |
117,2 | 118,2 | 0,8% | 369,1 | 358,9 | -2,8% | |
Central Structure | 1,2 | 0,8 | -33,8% | 3,4 | 3,1 | -7,7% |
Express & Parcels | 35,9 | 37,3 | 3,7% | 108,7 | 110,1 | 1,3% |
Banco CTT 1 | 9,0 | 19,3 | 113,8% | 24,8 | 42,9 | 73,1% |
Financial Services 1 | 6,3 | 9,0 | 42,5% | 18,9 | 24,6 | 30,3% |
Operating costs 2 | 150,7 | 157,7 | 4,6% | 459,8 | 466,3 | 1,4% |
EBITDA | 19,0 | 26,9 | 41,7% | 65,0 | 73,3 | 12,7% |
Leases (IFRS 16) | 8,2 | 6,7 | -18,4% | 24,9 | 20,4 | -17,9% |
EBITDA including IFRS 16 | 27,2 | 33,6 | 23,5% | 89,9 | 93,7 | 4,2% |
Impairments & provisions | 0,8 | 1,7 | 101,3% | 0,5 | 4,0 | » |
Depreciation & amortisation | 14,6 | 13,0 | -10,9% | 42,4 | 39,5 | -6,9% |
Specific items | 3,2 | 4,3 | 33,8% | 20,5 | 16,0 | -21,8% |
EBIT | 8,5 | 14,5 | 71,1% | 26,6 | 34,2 | 28,7% |
Financial results (+/-) | -2,4 | -2,9 | -21,6% | -7,2 | -7,9 | -10,2% |
Income tax for the period | 2,1 | -2,3 | -209,0% | 7,9 | 3,4 | -56,6% |
Non-controlling interests | 0,00 | 0,03 | » | 0,03 | 0,03 | 6,9% |
Net profit for the period 3 | 4,0 | 13,9 | 245,1% | 11,4 | 22,9 | 99,7% |
- In 2019 and in the same period of the previous year (proforma), part of the payments segment of the Financial Services business unit is considered within Banco CTT business unit, to which it migrated, and excluded from Financial Services. 321 Crédito was merged into Banco CTT business unit in 2019.
2 Excluding depreciation / amortisation, impairments and provisions, as well as the impact of IFRS 16 and specific items. 3 Attributable to equity holders.
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1. OPERATIONAL AND FINANCIAL PERFORMANCE OF THE BUSINESS UNITS
The revenues of the Mail business unit reached €358.9m in the 9 months of 2019, a decrease of €10.2m (-2.8%)vis-à-vis the same period of 2018, although the 3rd quarter posted a slight increase (+0.8%) due to the positive impact of the elections (+€5.3m).
The decrease is is mainly due to the combined effect of the decline of €8.0m (-2.4%) in the revenues of addressed mail and of €1.4m (-22.2%) in philately, mitigated by revenue growth of €0.7m (+12.4%) in unaddressed advertising mail and of €0.7m (+9.7%) in Business Solutions, and the effective increase in the average price of the basket of national and international services under the Universal Service4 (+1.8%).
Mail Volumes
Million items | ||||||||
3Q18 | 3Q19 | ∆% | 9M18 | 9M19 | ∆% | ∆% / | ||
working day | ||||||||
Transactional mail | 137.6 | 127.0 | -7.7% | 445.2 | 405.9 | -8.8% | -8.3% | |
Advertising mail | 12.5 | 11.2 | -9.9% | 43.1 | 35.6 | -17.3% | -16.9% | |
Editorial mail | 8.4 | 8.2 | -2.2% | 27.5 | 25.5 | -7.5% | -7.0% | |
Addressed mail | 158.4 | 146.4 | -7.6% | 515.7 | 467.0 | -9.5% | -9.0% | |
Unaddressed mail | 105.6 | 138.9 | 31.4% | 316.8 | 376.5 | 18.8% | 19.5% | |
The evolution of transactional mail volumes (-8.8%) was influenced by the decrease of domestic ordinary mail volumes (-10.1%) with less 34.7 million items, mainly in the banking and insurance, utilities & telcos, and Government sectors, as well as of priority mail volumes (-16.9%) that posted a reduction of 3.0 million items. Green mail grew (+19.8%) due to some product substitution, as the prepaid line of registered mail and priority mail products was discontinued.
Inbound international mail volumes continued to contribute positively to the revenues with an increase of €2.9m (+10.2%). Revenues of the outbound international mail (+€4.5m; +14.7%) were positively influenced by the items associated with the 2019 legislative election process, which led to an increase of €4.8m in the 3rd quarter of 2019 over the same period of the previous year.
The downward trend of addressed advertising mail volumes slowed down in the 3rd quarter of 2019 to -9.9% (which compares to -15.7% and -25.2% in the 1st and 2nd quarters, respectively) reaching a decline of 17.3% in the 9 months of 2019. The implementation of the new General Data Protection Regulation (GDPR) and the dematerialisation of processes, the change of the business model and the communication and marketing media to other advertising solutions continued to affect this product.
Unaddressed advertising mail maintained an upward trend in the 3rd quarter of 2019 (+31.4%), which compares to 5.9% and 18.5% in the 1st and 2nd quarters, respectively, allowing for a consolidated growth in volumes of 18.8% in the 9 months of 2019 due to the gain of market share. As a result of the legislative elections process, an important infomail communication service was obtained, with a positive influence in the last month of the 3rd quarter.
Business solutions revenues grew €0.7m (+9.7%) vis-à-vis the 9 months of 2018. Special note to the new geographical services offer leveraged by new technological tools and new document production services.
- Including letter mail, editorial mail and parcels of the Universal Service, excluding inbound international mail.
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CTT – Correios de Portugal SA published this content on 30 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2019 17:16:07 UTC
