March 19, 2019 / 5:13 PM / 3 months ago

UPDATE 1-Poste positive on 2019 as mail and parcel revenue stabilises

(Recasts to add CEO, CFO comments, stock reaction)

By Francesca Landini

MILAN, March 19 (Reuters) - Poste Italiane expects operating profit and revenue to grow further this year after improving in 2018 as the former postal services monopoly starts to reap the benefits of a restructuring plan for its mail and parcel business.

The group controlled by the Italian government said on Tuesday it sees its earnings before interest and tax (EBIT) rising to 1.6 billion euros this year, after jumping 33.5 percent to 1.5 billion euros in 2018.

This year revenue is projected to reach 11 billion euros after the company reported a better-than-expected 2.2 percent increase in 2018 to 10.864 billion euros.

The dividend policy was confirmed as forecast in a business plan to 2022.

“Last year marked a stabilisation of mail and parcel revenue after 10-15 years of decrease,” chief executive Matteo Del Fante told journalists at a press conference, adding that the group wants to exploit e-commerce growth with new technologies in the future.

Mail and parcel revenue shrank by 1 percent in 2018 after a 5 percent fall the previous year.

Poste last year signed an agreement with labour unions to extend parcel delivery to the weekends and have staff hand over both parcels and letters to clients.

Del Fante said the group was studying delivery with drones and driverless vehicles to win more clients.

Shares in the group, which was partly privatised in 2015, ended up 2.6 percent at 8.36 euros and the CEO said it was up to the treasury to decide whether it wanted to increase Poste’s capital listed on the market.

Italy’s treasury and state lender Cassa Depositi e Prestiti are the core shareholders of Poste, and Rome has promised the European Commission to make privatisations worth 18 billion euros this year.

Poste, which was founded in 1862, has become a conglomerate that comprises insurance and financial divisions and a digital payments unit in addition to the traditional mail and parcel business.

Speaking about potential new ventures, Del Fante dismissed media speculation the group could be involved in the rescue of troubled carrier Alitalia.

Poste, which owns around 15 percent of banking services provider SIA, was reviewing any option for supporting the company’s growth, including the possibility of acquisitions or a future merger with a rival.

Rival payment services provider Nexi is currently preparing to list on the Milan bourse. Poste executives have hinted that it may later become a potential merger partner for SIA.

“Let’s see which valuation the market will give to Nexi and then we will see,” Poste’s chief financial officer Guido Nola said at the press conference.

Poste said it would pay a dividend of 0.441 euros per share.

$1 = 0.8819 euros Reporting by Francesca Landini; Editing by Valentina Za and Jan Harvey

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