CTT - Correios De Portugal (CTT) Q3 2024 earnings summary

Executive summary

• Revenues for the first nine months of 2024 reached €792.3 million, up 10.7% year-on-year, driven by record Express & Parcels growth and resilient Mail and Bank performance.

• Express & Parcels volumes and revenues grew sharply, with 44% year-on-year growth and record-breaking peak season performance.

• Net profit attributable to equity holders fell 21.9% year-on-year to €27.8 million, mainly due to lower public debt placements and higher operating costs.

• Free cash flow dropped to €8.5 million in 9M24, reflecting higher investments, working capital needs, and lower Financial Services activity.

• Share buyback and capital reduction programs continued, reducing share capital and own shares.

Financial highlights

• Revenues (excluding financial services) grew 17.3% year-on-year in Q3, with Express & Parcels revenue up 44% year-on-year to €330.5 million.

• Recurring EBIT for 9M24 was €54.6 million, down 19.7% year-on-year, with margin at 6.9%.

• EBITDA for 9M24 was €110.6 million, down 4.3% year-on-year.

• Net financial debt at 30 September 2024 was €2.7 million, reflecting investments, dividends, and share buybacks.

• Operating costs rose 13.6% year-on-year, mainly from Express & Parcels growth and inflation.

Outlook and guidance

• Guidance reaffirmed for full-year recurring EBIT in the €80–90 million range, with logistics minimum at €70 million.

• Strong Q4 expected, with record peak season in Express & Parcels and mail revenue improvement already visible in October.

• Public debt placements in Financial Services are rebounding after regulatory changes, supporting a strong Q4.

• Focus remains on Express & Parcels expansion in Iberia, cost control, and investments in IT and network capacity.

• High macroeconomic and geopolitical uncertainty expected to persist in Q4 2024.