PostNL forecasts profit well below market expectations, to cut jobs

By Diana Mandia

(Reuters) -Dutch postal firm PostNL on Monday forecast a 2023 operating profit significantly below market expectations and said it would cut between 200 and 300 jobs this year to reduce costs.

The company's shares were down around 7% at 1127 GMT after falling as much as 12% in early trading.

PostNL said price adjustments would not be enough to fully offset cost increases of around 185 million euros in 2023, mostly driven by transportation and energy and a new collective labour agreement agreed with trade unions in January.

Around 30 million euros might not be absorbed by pricing policies in 2023, it said, adding to the 80 million euros of unmitigated cost increases last year.

PostNL forecast normalised operating profit of between 70 million and 100 million euros in 2023, compared with 84 million euros last year.

The outlook was 43% below consensus, according to Jefferies, while UBS said the guidance was "materially below" consensus expectations.

PostNL said it would cut jobs in support positions such as head office and staff related roles by the end of the year, resulting in restructuring and other costs of 20 million euros ($21.1 million) in 2023.

The postal group will also delay the second tranche of its share buyback programme, planned for this year, until there was a further recovery in business performance.

Pointing to post-pandemic overcapacity in the market and high inflation eroding consumer demand, PostNL forecast a low-single-digit percentage decline in 2023 volumes, but said it saw growth in the long term, with a margin improvement of at least 200 basis points by 2024.

"Our competitors, but clearly also our clients, expected for 2022 a year of growth and that obviously led to investments in capacity," finance chief Pim Berendsen told Reuters.

($1 = 0.9475 euros)

(Reporting by Diana Mandiá in Gdansk; Editing by Milla Nissi, Kirsten Donovan)