How are Poste Italiane’s accounts going?
Double-digit growth for Poste Italiane's profit in the first quarter of the year. Del Fante: “Very positive start to the year, rigor on the level”. The role of the lower capital gains realized on Bancoposta's BTP portfolio
Quarterly in the name of growth for Poste Italiane.
The company led by Matteo Del Fante closed the first quarter of 2024 with a net profit of 501 million, up 16% compared to the same period in 2023, +6.1% for revenues at 3.05 billion. The company highlights the "substantial growth in operating profit in the first quarter of 2024, equal to 14% on an annual basis, which stands at 706 million, thanks to the diversified business model".
However, the effect of the lower capital gains realized on Bancoposta's BTP portfolio is being felt on Poste Italiane's January-March accounts.
As highlighted by CEO Matteo Del Fante, a reward is also on the way for shareholders: the balance of the dividend of 44 cents per share will be paid on 21 June.
Also today, the postal company announced the new agreement on postal savings for the three-year period 2024-2026 with Cdp. In terms of remuneration, in 2023 it was equal to 1.73 billion, so "it can be said that we are in continuity or potentially marginally improving compared to last year" explained Del Fante in the conference call. According to the terms approved in the new agreement, the annual remuneration for the collection and management service of vouchers and passbooks by Poste Italiane is expected to be between a minimum of 1.60 billion euros and a maximum of 1.90 billion euros against agreed net collection targets.
All the details.
INCREASING REVENUES AND NET PROFIT FOR POSTE ITALIANE
As of March 30, the company reported revenues of €3 billion, up 6.0% year-on-year. Net profit reached 501 million, up 16%, compared to the same period in 2023.
The operating result in the first quarter stood at 706 million euros, up 14%.
THE IMPACT OF THE LOWER PROFITS REALIZED LAST YEAR FROM THE BTP PORTFOLIO
The effect of the lower capital gains realized on Bancoposta's BTP portfolio is being felt on Poste Italiane's accounts for the first quarter, Radiocor reports. Net profit and revenues, in fact, grew by 16 and 6% respectively, net of the impact of the Gap – Active Portfolio Management (i.e. the capital gains realized on BancoPosta's BTP portfolio). On revenues and operating profit this impact was equal to 168 million in the first quarter of 2023 against 22 million in the first quarter of 2024, while the impact on net profit was equal to 121 million in the first quarter of 2023 against 16 million in the first quarter of 2024.
Gross of this effect, revenues rose by 0.7 percent, EBIT fell by 8 percent and net profit by 7.1 percent.
Net, as mentioned above, group revenues increased by 168 million (+6% on an annual basis), group operating profit increased by 85 million (+14% on an annual basis) and group net profit increased of 66 million (+16% on an annual basis), excluding active portfolio management (Gap).
COSTS ALSO CONTINUE TO RISE
At the same time, total costs are also growing: in the first quarter of 2024, they amounted to 2.3 billion euros, recording an increase of 3.7% on an annual basis.
Specifically, ordinary personnel costs stand at 1.4 billion euros, up 3.0% on an annual basis, with the reduced number of FTEs partially mitigating the planned salary increase, in line with the strategic plan . Other costs reach 1.1 billion, up 6.2% year-on-year, following the growing volume of commercial activities, while including the impact of inflation.
SOLID CAPITAL POSITION
Furthermore, the group confirms a solid capital position: Total capital ratio of Bancoposta equal to 24.9% (of which Cet1 ratio equal to 21.3%), Leverage ratio equal to 3.3% and Solvency II ratio of the Poste insurance group Life equal to 313%.
DEL FANTE: “SUCCESSFUL IMPLEMENTATION OF THE PLAN”
“It was a very positive start to the year,” comments CEO and General Manager Matteo Del Fante, “with overall Group revenues exceeding 3 billion euros and contributions from all segments, in line with our strategy. These results demonstrate how we are rigorously implementing our plan , with a continued focus on achieving commercial results and rationalizing costs. Business trends have been favorable across all sectors, as our customers continue to view Poste Italiane as a safe haven for their savings and a one-stop shop for most of their daily needs. Positive net inflows in savings management and insurance products, together with stable retail deposits, are proof of this."
“At our Capital Markets Day two months ago, we outlined “The Connecting Platform” strategic plan, with the aim of redesigning our business to continue to achieve substantial growth. We have established ourselves as the largest phygital platform company in Italy, committed to serving the largest customer base in the country, meeting both long-term and day-to-day needs. This is our first update on our progress along this new path, and it contains solid results! We have achieved quality results in each of our four business units, supported by positive business trends. We are successfully implementing our plan, with a continuous focus on cost rationalization to mitigate inflationary impacts” concluded Del Fante.
REVENUES FROM MAIL, PARCELS AND DISTRIBUTION ARE GROWING
Looking at the various businesses, revenues from mail, parcels and distribution grew by 4.6% year on year, reaching €934 million. Mail revenues increased in the first quarter of 2024 by 3.0% year-on-year to €535 million, supported by repricing actions and a more favorable product mix, which offset lower volumes, down 9%, 2% year-on-year, with average prices up 12.2% in the quarter.
According to Del Fante "in the mail, parcel and distribution segment, revenues were driven by stable volumes of registered mail and by re-pricing actions, which offset the strong decline in unregistered mail, as well as by the growth in parcel volumes" .
INTEREST RATES SUPPORT FINANCIAL SERVICES MARGINS
In the first quarter of 2024 gross revenues (including intra-sector distribution fees) decreased by 5.4% year-on-year to €1.6 billion (+€56 million, up 4% year-on-year, excluding Management Portfolio Active). In the first quarter of 2024 net interest income (NII) increased by 8.2% year-on-year to €590 million, supported by a higher level of interest rates and stable retail deposits.
In financial services, “revenues increased 5%, excluding the effects of active portfolio management, supported by solid interest margin and substantial postal savings distribution fees, as well as underlying positive momentum in consumer lending and in commissions from managed savings" highlighted the number one of Poste Italiane.
THE GROWTH OF POSTEPAY CONTINUES
Revenues from payments grew by 13.7% on an annual basis, reaching 283 million, thanks to the key role of PostePay, which "confirms its leadership in e-commerce payments, growing by 16% in the first quarter of 2024. ”
In the first quarter of the year, revenues from Postepay Services stood at €379 million, +17.3% on an annual basis, "confirming Postepay's key role as a leader in the rapidly growing and continuously evolving market of digital payments in Italy" explains the company. Telco services revenues increased 1.8% year-on-year to €81 million in Q1 2024, supported by the fiber offering and benefiting from a loyal customer base of 4.8 million users, in a challenging market . Poste Energia's offer for electricity and gas, launched in June 2022 and available on the retail market, contributed €15 million to revenues in the quarter2.
POSITIVE NET INCOME FOR THE INSURANCE SECTOR
Finally, in the first quarter of 2024, revenues from the insurance sector stood at 397 million, up 1.0%. Revenues from the Investment Life and Pension insurance sector amounted to €363 million in the first quarter of 2024, down 3.0% on an annual basis, supported by a greater release of CSM (€337 million in the first quarter of 2024 compared to €313 million in the first quarter of 2023). “Net inflows in Life products continued to be positive, recording a better performance than the market with a reduced surrender rate in a challenging context” specifies the company note.
For CEO Del Fante, "our insurance business continues to record positive net inflows, which highlights a performance well above the market trend, with a reduced surrender rate, together with greater profitability of the protection business ”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/come-vanno-i-conti-di-poste-italiane/ on Wed, 15 May 2024 14:46:25 +0000.