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Investing.com -- PostNL (AS:PTNL) on Monday plunged to a €24 million quarterly loss after a government rejection of financial support forced a €40 million impairment on its mail business, casting doubt on the future of the Dutch postal service.
The Dutch mail, parcel and e-commerce company reported second-quarter revenue of €807 million, up slightly from €795 million a year earlier.
However, operating income turned negative at €26 million, compared with a €15 million profit in the same period last year.
The loss was attributed primarily to the impairment charge at Mail in the Netherlands, following the government’s denial of PostNL’s application for a financial contribution to cover universal service obligation costs in 2025 and 2026.
PostNL said it would appeal the government’s decision and file for preliminary legal proceedings, requesting an advance payment.
The company said the current regulatory proposal would result in a loss-making universal service through at least 2029.
No interim dividend will be paid for 2025 due to the uncertainty surrounding the future postal framework and financial impact of the impairment.
Parcels revenue increased 2.8% to €604 million from €587 million, supported by a 2.2% volume increase. International parcel volume rose 10%, while domestic volumes remained flat.
Normalised EBIT for Parcels fell to €13 million from €18 million. The company reported €9 million in cost savings from operational adjustments, but a less favorable product mix and continued client concentration offset pricing gains.
Mail in the Netherlands recorded a decline in volume of 8.3%, largely due to the absence of election mailings that had occurred in the second quarter of 2024.
Segment revenue decreased to €311 million from €318 million. Normalised EBIT dropped to a €2 million loss from a €2 million profit in the prior-year period.
PostNL cited wage increases, illness-related costs, and pressure on international mail costs. Structural cost savings of €10 million and a €5 million release from disability-related provisions partially offset these increases.
Group-wide normalised EBIT for the second quarter was €11 million, compared with €18 million last year. The reported figures exclude one-off items, including the impairment charge.
Free cash flow came in at negative €47 million, compared with negative €19 million in the second quarter of 2024, due in part to the payment of a €14 million coupon on a sustainability-linked eurobond and working capital shifts.
PostNL’s adjusted net debt rose to €562 million at the end of June, up from €474 million at year-end 2024.
Consolidated equity declined to €151 million from €202 million over the same period. The loss for the first half of the year totaled €41 million, compared with a €9 million loss in the first half of 2024.
The company reaffirmed its full-year outlook, stating that normalised EBIT for 2025 is expected to be in line with 2024, which ended at €53 million. Projected free cash flow remains in the range of negative €10 million to €50 million.