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PostNL forecasts 2024 profit below expectations on growing wage bill

By Lina Golovnya

(Reuters) -Dutch postal company PostNL said on Monday 2024 operating profit will fall below expectations, as higher wages drive up costs and muted domestic volumes weigh on parcel growth, sending its shares down more than 4% in early trading.

The company, which delivers parcels and letters across Belgium, the Netherlands and Luxembourg, sees normalised earnings before interest and taxes of between 80 million and 110 million euros ($87 million and $119 million) this year.

The mid-point of the guidance is around 20% below analysts' consensus of 118 million euros, Jefferies said in a note.

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"The ongoing volume decline in an environment of high pressure on costs, largely related to labour, requires ongoing cost savings," PostNL said about its Dutch mail operations.

It expects significantly higher organic costs of around 155 million euros this year, mainly related to rising labour costs.

PostNL expects domestic parcel volumes to rise 2-4% this year, broadly in line with last year's growth of 2.3%.

At group level, it sees parcel growth of 7-10%, aided by double-digit growth in international volumes thanks to rising traffic from Asian online retailers.

"We remain confident in the future growth in the e-commerce market, underpinned by the positive trend in online penetration, while acknowledging the ongoing uncertainty in the economic environment," CEO Herna Verhagen said in a statement.

The company plans to boost its market presence by retaining existing e-commerce clients and acquiring new ones in both Asia and Europe.

PostNL delivered 95 million parcels during the typically busy end of year holiday quarter, up 0.9% from a year earlier. However, domestic volumes declined by 3.8% in the same period.

The group confirmed its preliminary figure for 2023 normalised operating earnings of 92 million euros, and reported annual revenue of 3.17 billion euros.

($1 = 0.9240 euros)

(Reporting by Lina Golovnya in Gdansk; editing by Milla Nissi)