Dutch government rejects PostNL request for financial support (updated)
21/02/2025 10:09
(Adds share price move in paragraph 3, government and company
response in paragraphs 5-7, graphic, context throughout)
By Alessandro Parodi and Bart H. Meijer
Feb 21 (Reuters) - The Dutch government has turned down
a request for financial support from national postal service
provider PostNL PTNL.AS to help keep its services running, it
said in a statement on Friday, sending the company's shares
lower.
The Ministry of Economic Affairs said it was exploring
measures to support postal services, and did not want to take
any irreversible steps before parliament and regulators had
decided on a way forward.
PostNL shares fell over 4% in early trading in Amsterdam.
The company had earlier requested the government provide a
temporary financial contribution towards universal service
obligation costs of 30 million euros ($31.5 million) in 2025 and
38 million euros in 2026.
"Temporary or definitive measures that PostNL is
requesting, like government support, are not being considered at
the moment," the ministry said.
But the company, which delivers parcels and letters across
the Netherlands, Belgium and Luxembourg, insisted its request
for support was driven by necessity and had a clear legal basis.
"This does not align with the level of diligence we are
accustomed to from the ministry," a company spokesperson told
Reuters. "We expect the minister to make a (well-substantiated)
decision based on the law."
The group cut its 2024 profit forecast in January for a
second time, citing an "unsustainable" business model.
Net debt rose 28% to 592 million euros in the third
quarter, and the company posted a loss of 21 million euros in
the same period.
The Europe-wide USO directive requires letters and
parcels to be delivered within five days throughout each member
state which can be costly.
Traditional postal services in Europe, some of which are
facing financial pressures, are struggling to keep up with
competition from other parcel locker firms such as Poland's
InPost INPST.AS and Amazon AMZN.O .
($1 = 0.9531 euros)
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PostNL's market cap shrunk to a quarter of its 2021 levels https://reut.rs/3ERgdF2
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(Reporting by Alessandro Parodi and Bart Meijer; Editing by
Rachna Uppal)
((Alessandro.Parodi@thomsonreuters.com;))