PostNL says pension costs, TNT stake could delay return to dividends
AMSTERDAM, Nov 3 (Reuters) - Dutch mail company PostNL reported increased profits in the third quarter but warned pension funding costs and the poor share price performance of its stake in logistics company TNT Express could delay a return to dividend payments.
Shares in the company were down 4 percent at Monday's open.
The company's operating results improved compared with the previous quarter, with an 8.1 percent e-commerce-fuelled increase in parcel volumes helping to compensate for an 11.1 percent fall in mail volumes in its key Dutch postal market.
Underlying cash operating income doubled to 34 million euros ($42.5 million) from the year before, on revenue of 988 million euros, which was up from 969 million euros a year earlier. PostNL stuck to second-quarter guidance that it would earn full-year profit of between 260 million euros and 290 million euros.
Results were helped by cost cuts and price increases, though Chief Executive Herna Verhagen said cost cuts would need to continue to compensate for continuing declines in mail volumes in The Netherlands.
But the poor share performance at TNT Express, whose shares have sunk 31.4 percent over the year to date, and the cost of financing the pension fund in a low interest-rate environment could slow a return to dividend payments.
"Dividends depend partly on operating results partly and the rest depends on pensions and shares in TNT Express. On the second, you can see negative developments and that influences the moment when you can pay out dividends," said Chief Financial Officer Jan Bos.
The company owns a 14 percent stake in TNT Express, which it intends to sell when market conditions are right. It expects to hold its stake for the "mid-to-long term."
($1 = 0.8006 euro) (Reporting by Thomas Escritt; Editing by Gopakumar Warrier and Mark Potter)
