EU TRANSPORTATION: PostNL: 3Q Results
(PNLNA: NR/BBB-/NR)
Earnings not a mover but pressure on it to perform in the 4Q to meet FY guidance. The imminent responses from the government are larger movers here. We would reiterate caution to ignoring steps when a co is on the edge of IG - the 31s should not screen relative value to anyone. Some context for risk of takeover; Amazon recently announced it was investing €1.4b into expanding services within the country - PostNL itself is only worth €1b. Reminder Křetínský owns 29%.
- 3Q revenue €762m, largely unch y/y. YTD at €2.35b, +1.5%.
- Parcel revenue €581m, +1% (v+1%), Mail €289m unch y/y (v-5%, -5.6% ex. election)
- 3Q adj. EBIT -€21m (vs. -€18m LY). YTD -€26m (vs. -€9m LY)
- Parcel +€4m, Mail -€23m
- FCF -€98m YTD (vs. -€94m LY)
- Net debt at €572m
FY guidance unch:
- adj. EBIT to be in line with LY (€53m)
- implying 4Q EBIT of €79m (vs. €62m LY)
- FCF to be negative
- Repeats intention to pay a final dividend (after scrapping interim)
Asides from call:
- Expects decision on the appeal for government financial contribution in coming weeks. Also expects reaction from minister on intention to withdraw as the USO.
- Tailwinds for 4Q EBIT rise include cost savings accelerating, more pricing up and some election mail support.
- Still sees breakeven profit for Mail achievable only once T+3 delivery time comes into effect (currently scheduled for July 2027).
- It was asked about Amazon announcing it would invest €1.4b into Netherlands last week, the "most significant financial commitment to the Netherlands since the launch in 2020". It said it is watching competitor actions and played down exposure to Amazon (as a client) saying not top-5.
- Parcel market share down -1-2ppt as it targets profitability/improving yield (well flagged).
- Still seeing market consolidation - top 20 clients accounted for 57% of volumes. (often flagged as driver for competitive price pressures)
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
USDCAD TECHS: Fresh Cycle High
- RES 4: 1.4111 High Apr 10
- RES 3: 1.4045 3.0% Upper Bollinger Band
- RES 2: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
- RES 1: 1.3989 200-dma
- PRICE: 1.3953 @ 16:02 BST Oct 3
- SUP 1: 1.3897/3825 Low Sep 30 / 50-day EMA
- SUP 2: 1.3727 Low Aug 29 and a bear trigger
- SUP 3: 1.3689 Low Jul 28
- SUP 4: 1.3637 Low Jul 25
A bull cycle in USDCAD remains intact and yesterday’s break above the late September’s high, firms the bullish theme. This move higher also maintains the bullish price sequence of higher highs and higher lows. Note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4019, a Fibonacci retracement point. On the downside, first key support lies at 1.3825, the 50-day EMA.
AUDUSD TECHS: Support Remains Intact For Now
- RES 4: 0.6763 1.382 proj of the Jun 23 - Jul 24 - Aug 21 price swing
- RES 3: 0.6726 1.236 proj of the Jun 23 - Jul 24 - Aug 21 price swing
- RES 2: 0.6660/6707 High Sep 18 / 17 and key resistance
- RES 1: 0.6629 High Sep 30 & Oct 01
- PRICE: 0.6603 @ 16:01 BST Oct 3
- SUP 1: 0.6527/21 61.8% of the Aug 21 - Sep 17 bull leg / Low Sep 26
- SUP 2: 0.6484 76.4% retracement of the Aug 21 - Sep 17 bull leg
- SUP 3: 0.6463/6415 Low Aug 27 / Low Aug 21 / 22 and a bear trigger
- SUP 4: 0.6373 Low Jun 23
The AUDUSD uptrend remains intact and recent weakness appears to have been a correction. Support to watch lies at the 50-day EMA, at 0.6558. A clear break of this average would signal scope for a deeper retracement and expose 0.6527 once again, a Fibonacci retracement. For bulls, a stronger reversal higher would refocus attention on 0.6707, the Sep 17 high. Initial resistance to watch is 0.6629, the Sep 30 and Oct 1 high.
US TSYS/SUPPLY: September's Coupon Auctions Were Generally Solid (2/2)
September’s coupon auctions were generally solid, with three lines trading through, two coming out on the screws and two tailing slightly.
- Looking through the lens of MNI’s Relative Strength Indicator (RSI), five lines saw positive readings while two saw negative readings.
- The 3-year sale was the strongest auction of the month according to MNI’s RSI. The 3-year line traded through 0.7bps, the largest stop through in seven months. Meanwhile, the primary dealer take-up was just 8.4%, the lowest on record (data going back to 2003).
- The weakest sale of the month was the last – the 7-year line. This line saw the second consecutive 0.5bp tail, with the 12.0% primary dealer take-up above August’s 9.8% and July’s record low 4.1%.
September Auction Review:
- 2Y Note on-the-screws: 3.571% vs. 3.571% WI.
- 2Y FRN: 0.200% high margin vs. 0.195% prior
- 3Y Note trade-through: 3.485% vs. 3.492% WI.
- 5Y Note tail: 3.710% vs 3.709% WI.
- 7Y Note tail: 3.953% vs. 3.948% WI.
- 10Y Note trade-through: 4.033% vs. 4.047% WI.
- 10Y TIPS: 1.734% high yield vs. 1.985% prior
- 20Y Bond trade-through: 4.613% vs 4.615% WI.
- 30Y Bond on-the-screws: 4.651% vs. 4.651% WI.
