Belgium's Bpost reinstates core profit guidance, sees lingering U.S. difficulties

By Olivier Cherfan and Augustin Turpin

(Reuters) -Belgium's Bpost reported EBIT above consensus and reinstated its previously withdrawn 2023 core profit forecast on Thursday, taking into account recent updates on compliance reviews for its services to the Belgian state.

The group, which delivers mail and parcels and provides e-commerce logistics, now expects adjusted earnings before interest and taxes (EBIT) of more than 240 million euros ($257 million) for 2023, and an operating income to decrease by a low-single-digit percentage.

Bpost previously guided for EBIT to be 240 million to 260 million euros, following the preliminary results of the compliance review.

Bpost last December said that a review of its concession from the Belgian state for the distribution of newspapers and periodicals in the country had revealed potential violations of applicable laws.

The compliance review was later extended to other tenders and public contracts, with the group announcing in late September it had taken a 75 million-euro provision to cover potential penalties stemming from the audit.

The company published an adjusted EBIT for the quarter at 28.1 million euros, above the 23.6 million euros expected by analysts in a company-provided consensus.

Delivery and postal firms globally are looking for ways to hold onto market share as demand from e-commerce weakens. Bpost's European peers such as PostNL and DHL this week revised down their guidance in quarterly updates, still hit by a post-pandemic fall in online shopping.

Bpost reiterated its outlook for its second-biggest unit, parcels and logistics in North America, of a low double-digit percentage drop in operating income, reflecting Amazon's insourcing at U.S. unit Landmark Global, general price pressure, as well as lower growth momentum for Radial.

"(Radial) sales to new customers were unable to offset the decline in sales to existing customers," the interim CEO of Bpost, Philippe Dartienne, said in a call with journalists.

Dartienne warned that difficult market circumstances and customer losses in the U.S. would impact Bpost's current revenues and continue into the fourth quarter.

Operating income from the Belgian group's North American business decreased by 17.6% to 310.3 million euros in the third quarter, missing analyst's consensus of 314 million euros, while EBIT decreased 57% to 4.5 million euros, also below consensus.

The group also welcomed its new CEO, Chris Peeters, appointed for a period of six years, who officially took office this week.

($1 = 0.9341 euros)

(Reporting by Augustin Turpin and Olivier Cherfan in Gdansk; editing by David Evans and Leslie Adler)