CTT profits fall 53.9% to 7.4 million euros until March – Telecommunications

You CTT – Correios de Portugal closed the first quarter with profits of 7.4 million euros, representing a drop of 53.9%or 8.7 million euros less, compared to the same period last year.

In a statement sent this Wednesday to the Securities Market Commission (CMVM), the company led by João Bento informs, however, that operating income increased by 9% ((or 21.7 million euros) to 263.5 million euros compared to the first three months of last year.

The rise was driven by express and parcels, Banco CTT and mail and others. The segments of financial services and retail recorded a negative variation attributed to the “extraordinarily high level of public debt placement” between January and March 2023. By parts: the express and parcels segment grew 56.8% to 101.4 million euros, “reflecting strong growth in
traffic both in Spain (+120.9%) and in Portugal (+12.4%), while mail and others saw revenues rise 5.2% to 120.3 million euros “mainly due to price increases , the evolution of the ‘mix’ and traffic of the legislative elections”.

In reverse, CTT’s financial and retail services suffered a “fall” of 80.8%, with revenue amounting to just 5.5 million euros. “This unfavorable performance, when compared to the same period last year, comes mostly from the behavior of public debt securities”, explains the company, remembering that, “in the first quarter of 2023, public debt securities reached historical maximum placement levels , induced by the greater attractiveness of the product when compared to bank deposits”.

However, he points out, “the change in marketing conditions in June 2023 reduced the attractiveness of this product for savers, due to the reduction in interest rates, and limited the marketing capacity, due to the drastic reduction in the maximum application limits per subscriber “. “It is expected that a possible future change in marketing conditions will once again increase the attractiveness of this product”, he adds.

Public debt securities (savings certificates and savings growth treasury certificates) showed yields of 2.1 million euros – a drop of 91.1%. In the first quarter, subscriptions totaling €294.8 million were made, which compares with €7.5 billion in subscriptions in the same period last year.

“Naturally, performance in the first quarter of 2023 benefited exceptionally from the aforementioned context. However, it should be noted that Q1 2024 performance is being hampered by marketing limitations introduced in June 2023“, insists the company, pointing out in the same document that, between 2019 and 2021, before the change in the interest rate framework that has occurred since 2022, the average of quarterly placements was approximately one billion euros. In this context, given the ” exceptionally weak quarter in terms of public debt placement”, the recurring EBIT amounted to 2.9 million euros.

Already Banco CTT’s income amounted to 36.2 million euros between January and March, rising 6.3% “due to the expansion of the customer base (658 thousand accounts were reached, that is, 11 thousand more compared to December 2023) and business volume (+396 million euros) , registering an increase in the financial margin anchored in the growth of the respective auto and housing loan portfolio, he specifies.

CTT increased net profit by 66.2% to 60.5 million euros in 2023, the year in which, for the first time, the express and parcel segment led the company’s revenue.