Belgium’s Bpost beats Q1 profit forecast but warns of risk in 2022

-Belgian postal operator Bpost on Thursday reported consensus-beating core profit but warned of a 40 million euro downside risk to its 2022 guidance from rising inflation and a drop in parcel volumes as COVID-19 restrictions unwound.

The group’s adjusted earnings before interest and taxes (EBIT) for the first quarter came in at 93 million euros ($97.59 million), down nearly 20% from the previous year, but above analysts’ 84.8 million euros forecast.

Bpost said these results, in line with its full-year guidance, were supported by strong mail revenues and growth at its Radial unit in North America.

In February, it had forecast EBIT of between 280 million and 310 million euros this year, and operating income growth in the mid- to high-single-digit percentage range.

Inflation in the euro zone hit a record high of 7.5% in April, and rose 8.31% from a year earlier in Bpost’s home market Belgium.

The firm’s parcel volumes in Belgium this quarter also dropped 14.8% year-on-year.

European postal operators like Bpost and peer Deutsche Post have been pressured as e-commerce giant Amazon has handled more packages through its same-day delivery service Amazon Logistics. Amazon’s first Belgium delivery centre should open in Antwerp by the end of the year.

“In Belgium, where we are currently facing Amazon’s insourcing, inflationary pressures on costs and demand and the lack of fair competition in the last mile delivery of parcels, management is intensifying action plans to deliver on the transformation of our operating model” Chief Executive Dirk Tirez said in a statement.

Dutch rival PostNL, which benefited from a pandemic-driven boom in e-commerce, said in February it targeted normalised earnings before interest and tax (EBIT) of between 210-240 million euros in 2022, guidance in line with that of 2021.

($1 = 0.9529 euros)