CTT – Correios de Portugal has reached an operating income of 349.2 million euros by the end of the first semester, growing in every business, except Mail, even during the COVID-19 pandemic. During the second quarter of 2020 Express and Parcel businesses recorded the highest income ever and the highest EBITDA of the last five years.

Banco CTT (63% more than the same period last year),  Express and Parcels  (+16,9%) Financial Services and retail (+1,2%) contributed towards the operating income, thus making that its reduction, on account of the decline of Mail and Others, was of 1.6%  compared with the first semester of 2019.

The EBITDA reached  33.4 million  euros, which represents a decline of  28% compared to the same period in 2029, severely impacted by Mail and Others. The remaining business areas have grown during the first semester of 2020, and in June, the consolidated EBITDA grew again (+7,9%), pursuing thus a steady positive trend, iniciated during January and February, 2020.

As far as Express and Parcels are concerned, they recorded the best quarter ever in terms of income, reaching  47.8 million euros. The EBITDA of 2,2 million euros in these businesses during the second quarter of 2020, represents the best quarter of the last five years. It is worth mentioning the performance in Portugal, with an EBITDA of 3.5 million euros.

According to João Bento, CEO of CTT, “ CTT has seriously undertaken the mission to support the economy within these difficult times for companies and people, by continuing to operate, while assuring the safety of every worker and complying with every recommendation issued by the authorities. We knew how to react and launched a series of innovative digital services, from which it is worth mentioning  CTT Comércio Local (CTT Local Trade),  Criar Lojas Online (Create Online Stores) and  Feiras e Showrooms (Fairs and Showrooms) at Dott, by supporting the digital transition of companies, with special focus on SME's and small businessmen. These iniciatives enabled that Express segment recorded the best quarterly EBITDA of the last five years.”

“During the whole period of the pandemic we have been reinforcing the teams significantly, with more than 800 elements ( a net increase higher than 400) , most of whom as mailmen and we pursued several iniciatives to reinforce and increase the offer, namely the reinforcement of the operational fleet of transports and distribution, the development of new facilities adapted to a traffic with larger dimensions and the continuation of the plan to open a post office in every county capital, a voluntary and accelerated iniciative taken immediately after the relief of the confinement measures. We are going to continue to launch innovative services, to support the economy growth and to be even closer to the population, by connecting people and companies, fully delivering", concluded CTT CEO.

The net profit was of -2 million euros, which compares with  +9 million euros in the first semester of 2019, impacted by the negative evolution of the EBIT, partially compensated by the positive behavior of the corporation tax during the period. 

The mail business has been severely affected by the confinement and the cooling of the economy since the second half of March until May, due to  COVID-19. This situation implied a reduction of the working hours of CTT shops which resulted into a lower demand of  B2C services. Likewise in  B2B  segment there was a reduction of the activity, specially as far as the banking  services and utilities are concerned and also, of the Public Administration due to the closing or suspension of the activity of several public services and mail producers. As such, the operational income of mail has recorded a decrease of  13.7%, to  202.8 million euros.

The operating income of Express and Parcels reached  85.1 million euros during the first semester of  2020, increasing 12.3 million euros (+16,9%)compared to the same period in 2019 . During the second quarter of 2020 it reached  47.8 million euros, an increase of 11.7 million euros (+32,5%) compared to the same period in 2019, which shows a strong growth achieved during this period, where the company increased consistently and significantly  B2C deliveries.

In what concerns B2B, the first semester of 2020 was deeply influenced by the pandemic, which made that the end of March and the beginning of April were particularly affected by the restrictions imposed to most sectors of the economy. These restrictions had a strong impact in the shipments profile, translated into a reduction of the B2B traffic, be it parcels or load , although and by contrast, one has witnessed a strong growth of the e-commerce activity.

The growth of the Express and Parcels businesses obtained in Portugal, was the result, of a set of inniciatives launched by CTT aimed at speeding up and boosting  solutions that could help to recover the lost activity and to create growth opportunities, namely  the services  CTT Comércio Local (local trade), Criar Lojas Online (Create Online Stores), home delivery of medicines and  CTT Expresso para Hoje (Express for Today), among others.

Banco CTT income reached  38.4 million euros during the first semester of 2020 , a growth of 14.8 million euros (+63,0%) compared to the same period of last year, of which 11.2 million euros are from  321 Crédito, bought in May, 2019. Even excluding that organic effect, the income would have reached  22.1 million euros,  3.7 million de euros (+19,8%) more than during  the same period last year.  The income growth was also due to the positive performance of the financial margin during the first semester of this year, 12.3 million euros (+135,3%) more than during the same period last year, a growth which would have been of 3.2 million euros (+63,2%) without the above mentioned non-organic contribution. The commercial performance of Banco CTT has enabled an increase of the customers' deposits of 1 512 million euros (42,1%  more than during the first semester of 2019 and  17.8%  more than by the end of 2019) and the number of accounts , to  489 thousand  accounts  ( 81 thousand more than during the first semester of 2019 and 28 thousand more than by the end of 2019).

On the assumption that the gradual recovery of the economy and improvement of the pandemic situation will continue, CTT foresees that the growth levers of the company will continue to increase steadily.

Although one foresees that Mail will suffer declines as regards letters (statements) and direct mail, which will lead to a two digit decline of the addressed mail during the current year, one expects a steady and positive performance of Express and Parcels, of Banco CTT and Financial Services. Express and Parcels should be kept as the main growth driver, leveraged by the continued progression of e-commerce, which will get closer to the average of the developed markets and by the continued increase of the market share; Banco CTT  is sufficiently provisioned and well capitalized to face eventual challenges during the second semester of 2020 (according to the present forecasts) such as the GDP decrease and the unemployment rate as a result of the pandemic;  and the Financial Services will benefit from the Portuguese population savings growing tendency, which constitutes a positive forecast in terms of public debt placement. As such, all the businesses, with exception of Mail, will increase their income and EBITDA .

During the second semester of 2020, several initiatives aimed at improving operations with focus on margins and costs, will take place. The remarkable recovery verified during the end of the second quarter is seen as an incentive for the remaining financial year. As a result of the present commercial dynamics to fight against the sudden decline of mail, CTT expects to reach a growth in the operating income, driven by Express and Parcels businesses. It expects also to reach a EBITDA  higher than 90 million euros and an EBIT of 30 million euros more than during the financial year of 2020.