July 31, 2020 / 7:28 AM / 13 days ago

UPDATE 1-Poste sticks to dividend policy after better than expected Q2

(Adds details, slide presentation)

By Francesca Landini

MILAN, July 31 (Reuters) - Poste Italiane said it would retain its dividend policy after beating second-quarter results expectations on Friday helped by cost cuts.

Earnings before interest and taxes (EBIT) of 325 million euros ($386 million) were down 30% from a year early but beat an analyst consensus of 282 million, the Italian postal company said.

Revenue fell 13% to 2.33 billion euros for the three months to June 30 versus an analysts consensus of 2.31 billion.

In its strategic plan dubbed Deliver 2022, Poste had pledged to increase its dividend by 5% every year until 2020.

“We are keeping our dividend strategy unchanged ahead of the Deliver 2022 update in the fourth quarter,” CEO Matteo Del Fante said in a statement.

The group, which also offers financial and insurance services and operates a digital payments business, beat analysts expectations mainly due to a lower operating loss at its traditional mail and parcel business and a sound performance in insurance.

To mitigate the impact of the health crisis in Italy, the group cut its costs by 10% to 2 billion euros in the second quarter, reducing staffing and other expenses.

Rising parcel revenue partly compensated for a sharp fall in letter delivery.

The division posted an operating loss of 157 million euros, beating analysts expectations of a loss of 175 million but worse than its 67 million euro loss a year earlier.

The other three units all reported an operating profit, with the insurance business recording an EBIT of 248 million euros, ahead of the 232 million expected by analysts.

$1 = 0.8414 euros Reporting by Francesca Landini, editing by Giselda Vagnoni

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