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InPost sees better 2022 but warns slowing demand could hit peak season

FILE PHOTO: An InPost locker is seen in Hackney, London

By Olivier Sorgho

(Reuters) -Poland's InPost on Wednesday said it saw a better 2022 than initially expected, driven by parcel volumes, even as it warned of slowing demand towards the end of the year which could hit its peak Christmas holiday season.

InPost, whose automated parcel machines (APMs) allow customers to pick up their packages, said it delivered 178.8 million parcels in the third quarter, up 32% on last year.

"Not only margins, but also parcel volumes and sales will be better than initially expected," finance chief Adam Aleksandrowicz told journalists in a call, without providing a figure.

Quarterly sales grew 32.6% on the year to reach 1.69 billion zlotys ($361.81 million).

The firm however warned it had seen slower volumes in October and early November, which would likely hit its fourth quarter period encompassing the peak Christmas holiday season.

Preliminary data showed that inflation in Poland was 17.9% in October, driven largely by soaring energy prices, raising worries of consumers cutting back on spending.

CEO Rafał Brzoska said that InPost's recent pricing adjustments for large customers such as Allegro bodes well for its margins, a process that will continue into the first quarter of next year.

Answering a question on further price increases, Brzoska said "it's hard to imagine that anyone wouldn't consider (...) passing-on costs to some degree onto customers,". He added InPost would do its best to minimise price hikes next year for its internet store and merchant customers.

Its third-quarter adjusted core profit (EBITDA) margin dropped to 27.0%, from 32.1% a year earlier. The company had warned of expected margin erosion in the second and third quarters of 2022, with a bounce-back seen in the last quarter of this year.

In its key Poland market, the number of APMs reached 19,254 at the end of the quarter, up 17% against the end of 2021.

($1 = 4.6710 zlotys)

(Reporting by Olivier Sorgho; Editing by Lisa Shumaker and Louise Heavens)