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PostNL flags consumer spending drop after quarterly loss

FILE PHOTO: A PostNL employee is seen at the entrance of the UK Mission to the EU

(Reuters) -Dutch mail company PostNL is feeling the effects of high inflation and low consumer confidence, its chief executive said after the company reported third-quarter earnings in line with an October profit warning.

The group, which delivers parcels and letters across Belgium, the Netherlands and Luxembourg, said the macroeconomic background is becoming increasingly difficult.

"It has clearly impacted consumer spending," Herna Verhagen said in a statement. "Retail shops as well as web shops are now signalling that their stocks are growing."

Consumer sentiment in the Netherlands dropped to a historic low in September while inflation shot to a record high, driven by a 200% jump in energy prices.

PostNL reported a third-quarter operating loss of 20 million euros ($19.89 million), swinging from a profit of 20 million euros in the same period last year.

The company also said it was hit by higher labour and transportation costs.

"We expect these headwinds to continue in the quarters to come," Verhagen said.

PostNL now expects full-year costs to hit 135 million euros, up from 100 million euros projected previously. This includes a 10 million euro hit from labour costs related to renegotiation of a collective labour agreement.

However, the group still expects the fourth quarter to be the strongest of the year, with parcel volumes coming close to 2021 levels, it said.

PostNL's shares were up more than 4% by 1200 GMT.

($1 = 1.0055 euros)

(Reporting by Dagmarah MackosEditing by Christian Schmollinger and David Goodman)