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The Dutch postal service company PostNL, backed by Czech billionaire Daniel Kretinsky who is currently acquiring Royal Mail, has issued a stark warning about its profitability and called for urgent government intervention. The company’s shares plummeted by 8.4 per cent in Amsterdam following a disappointing trading update for 2024, highlighting its ongoing struggles with declining mail volumes and rising operational costs.
EP Group’s investment arm, controlled by Kretinsky and holding approximately 29 per cent of PostNL since 2021, faces mounting challenges as the postal service provider grapples with financial headwinds. The timing is particularly significant as Kretinsky’s empire moves towards completing its £3.6 billion acquisition of International Distribution Services (IDS), Royal Mail’s parent company, by March’s end.
The company’s operating profit forecast has been drastically reduced to €53 million, falling well short of its previous November estimate of €80 position. This downward revision comes alongside the announced departure of CEO Herna Verhagen, who will step down after April’s annual meeting, to be succeeded by current CFO Pim Berendsen.
Market analysts point to intensifying competition from parcel delivery firms, including locker operators, combined with the persistent decline in letter volumes and escalating fixed costs as key factors behind the company’s struggles. December’s performance proved particularly challenging, with reduced seasonal mail volumes in the Netherlands and increased labour costs due to staff shortages and higher sickness rates.
The situation has prompted calls for reform of the universal service obligation (USO), with Verhagen emphasising the unsustainability of the current business model. The company is actively seeking government support and regulatory changes to ensure the long-term viability of postal services across the Benelux region.
Industry experts, including Peel Hunt analyst Alexander Paterson, remain sceptical about potential synergies between PostNL and GLS, IDS’s European parcels business, citing fundamental differences in their operational models and market focus. The market response saw PostNL shares close down 5.9 per cent at €0.98 in Amsterdam, reflecting investor concerns about the company’s future prospects
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