Half Year 2026 CTT - Correios de Portugal SA Earnings Call Transcript
Key Points
- Strong organic growth of 6.3% in core business, with SEP (e-commerce) volumes growing 21% organically and 24% overall, driven by diversification into Iberian and EU marketplaces.
- Mail and services segment delivered strong profitability, with recurring EBIT margin improving from 5.4% to 7.5% year-on-year, excluding the one-off effect of 2025 elections.
- Banking segment showed robust growth with double-digit increases in deposits, off-balance savings, and loan book, and banking revenues up 7.4%.
- DHL joint venture synergies are on track at EUR 17.5 million, with 40% from revenue and 50% from operational efficiencies, enhancing the e-commerce platform in Iberia.
- Net debt to EBITDA leverage ratio improved significantly to 1.8x from 2.4x, providing strategic flexibility for capital allocation and opportunistic share buybacks.
- Customs clearance business (Casella) experienced a significant EBIT decline due to regulatory changes, including the end of de minimis exemption and new fees, leading to volume shifts and market share loss.
- Overall EBIT declined 8.4% in the quarter, primarily due to the temporary headwinds in the customs business, which has high incremental margins.
- SEP margins are under pressure from fuel inflation (EUR 2.4 million impact) and a shift in product mix towards heavier parcels from European players, which have lower incremental margins.
- The bank's recurring EBIT decreased slightly to 5.2 million as the company reinvests proceeds into technology and commercial capabilities, with a high non-performing loan ratio that remains above industry trends.
- Guidance for the full year is cautious, with a broad range for EBIT (EUR 115-125 million) due to limited visibility on customs volumes and the upcoming implementation of a new levy in November, which poses execution risks.
Hello and welcome to CTT's First Half 2026 Results Conference Call.
This event is hosted by Mr. Deepa Shek, CEO of CTT, Mrs. Joanna Freitas, CFO of CTT, and by Mr. Joan Souza, CCO of CTT.
(Operator Instructions)
I'll now turn the call over to Mr. Guy Pacheco, our CEO.
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Good morning to you all, and welcome to our first half 2026 conference call.
I would invite you to start in phase four, where we see our core business, Ceph and mail services, continuing to perform strongly with temporary headwinds on Cassesa as players anticipate the new. Regulatory context of the minimis.
We are the very healthy organic growth of 6.3% with strong contribution from our SEP business. Also a strong contribution from our mail services that is disguised by the effect of elections that accounted for 8.6 million last year. So if we account, we also
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