December 19, 2017 / 5:13 PM / a year ago

Portugal CTT to cut costs, overhaul business due to mail volume drop

LISBON, Dec 19 (Reuters) - Portugal’s postal service CTT hopes to boost its recurring EBITDA by 45 million a year starting in 2020 by overhauling its operations due to a fall in mail volume, which will involve wage and other cost cuts, while reinforcing the parcel service and the postal bank.

The plan will have a one-time cost of around 55 million euros and an incremental capital expenditure of around 25 million, it said.

“The times ahead will be of enormous challenges that require the commitment and effort of all,” it said in a statement, adding that it needed to create growth levers in express delivery services, especially for online purchases and to reinforce its financial activity via the postal bank Banco CTT.

CTT shares have lost one-fourth of their value after the company cut its 2017 EBITDA guidance by 20 percent on Oct. 31. (Reporting By Andrei Khalip, editing by Axel Bugge)

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