CTT Correios de Portugal SA reported a robust 9.5% year-on-year growth in revenue for Q1 2025, driven by strong performances in Express & Parcels and Financial Services. However, the company’s stock price fell by 11.14% following the announcement, as investors reacted to a 25.9% decline in net income and higher operating costs. The company also reaffirmed its guidance for organic recurring EBIT to exceed €100 million for the year.
Key Takeaways
- Revenue increased by 9.5% year-on-year, with strong growth in Express & Parcels and Financial Services.
- Net income declined by 25.9%, affected by HR restructuring and transaction costs.
- Stock price dropped by 11.14% after the earnings announcement.
- CTT reaffirmed its guidance for organic recurring EBIT to exceed €100 million in 2025.
- The company continues to invest in digital channels and integrate the Casesa acquisition.
Company Performance
CTT Correios de Portugal showed solid revenue growth of 9.5% compared to the same quarter last year, primarily fueled by a 23% increase in both Express & Parcels and Financial Services. The company maintained its market leadership in these segments, but net income fell by 25.9% due to HR restructuring and transaction costs. Operating costs rose by 8.8%, reflecting investments in quality and digital channels.
Financial Highlights
- Revenue: €289 million, up 9.5% year-on-year
- Recurring EBIT: Increased by 19.5%
- Net income: Decreased by 25.9%
- Free cash flow: €2.3 million
- Leverage: 1.7x, expected to reach 2.1x post-Casesa acquisition
Market Reaction
Despite the positive revenue growth, CTT’s stock price fell by 11.14% in the open market session, closing at €6.86, down from a previous close of €7.72. This decline positions the stock closer to its 52-week low of €4.02, reflecting investor concerns over the significant drop in net income and rising operational costs.
Outlook & Guidance
CTT reaffirmed its guidance for organic recurring EBIT to exceed €100 million in 2025, anticipating similar election impacts in Q2 as the previous year. The company expects banking profitability to stabilize in 2025, with significant growth projected for 2026. The integration of the Casesa acquisition and the anticipated completion of the DHL transaction in Q4 are key strategic priorities.
Executive Commentary
CEO João Zambujo expressed confidence in achieving the company’s guidance, stating, "We are fully confident that we will achieve [our guidance]." He emphasized the importance of quality, saying, "Quality is of utmost importance in this business." CFO Guy noted that "2025 will be a transition year in terms of [banking] model."
Risks and Challenges
- Rising operational costs could pressure margins if revenue growth slows.
- The integration of the Casesa acquisition poses execution risks.
- Market conditions could affect the performance of financial services.
- Potential regulatory changes in the postal and financial sectors.
- Economic volatility may impact consumer and business demand.
Q&A
During the earnings call, analysts questioned the flat margins in Express & Parcels, to which management attributed the need for quality investments. There were also inquiries about the banking strategy and growth outlook for financial services, with executives highlighting ongoing investments and a positive market environment.
Full transcript - CTT Correios de Portugal SA (CTT) Q1 2025:
Conference Operator: Good morning, and welcome to CTT first quarter twenty twenty five results conference call. Please note that this conference is being recorded. For the duration of the call, your microphone will be will be disabled. However, analysts will have the opportunity to ask questions at the end of the presentation. To do so, simply click on the button to raise your hand, and we will give you access to the microphone.
If you are dialing from a phone line, press 9 to raise your hands and 6 to unmute yourself. I will now turn the call over to mister Zambian CEO.
João Zambujo, CEO, CTT: Thank you. Good morning, everyone, and welcome to our first quarter results conference call. If we start with the if you bear with me in the first slide, which is slide number four, we believe we have we had a very decent quarter where recurring EBIT growth was driven by recovery in financial services. Indeed, in terms of revenue, we’ve seen growth on on on all three blocks, logistics, bank, and financial services, well, of around 9.5%, while EBIT grew almost 20%, a very significant growth. That is that was not even higher given the the the the impact of the last year’s general election.
Otherwise, it would it would have been even more significant. If we move to analyzing each business line starting in slide number six five, I’m sorry, with the with the express and parcels, we’ve we’ve seen continued growth in volumes, revenue, and recurring EBIT, while with softer than expected volumes, although growing a solid a solid 15%, which we see clearly above market growth. And this volume growth of 15% converted into revenue with with a strong improvement given a combination of price, average rate per object, and value added services. Indeed, we we convert 15% of volume growth into 23% of revenue growth. EBIT margin on the right sorry.
EBIT on the right grew 24.5% from 6.5 to €7,000,000 in the quarter. Although the EBIT margin was affected by some operational issues, mainly related with capacity increase since we keep very focused on providing very high quality, which is vital in this business. I will now invite my colleague, Jean Stoze, to guide us through the Mellon and others and and retail business areas.
Jean Stoze, Executive, CTT: Thank you, Joao. Good morning, everybody. As you can see on slide six on mail and others, we see revenue flat in mail and other segments compared to the previous year supported by the price increases and also the continued continued positive contribution from business solutions and payments, and the same applies to the rest of our revenues. Of course, on this analysis, we are excluding this extraordinary revenues from the elections that we had in the in the previous year. So we felt this is a a positive trend continuing to have this seeing this baseline revenue stabilization in in mail and others.
So excluding these extraordinary elections revenues in the we saw in address mail and address mail revenues, we are practically flat reaching €9,280,000. And million other revenues, we are also flat with €170,700,000 euros. Sorry. In EBIT, excluding, again, the the extraordinary effect of the election revenues, we reached 1,300,000.0 in EBIT, representing more than 200% of increasing comparing with last year. We also, on this on this area, continue to maintain a cost control that which help us to manage the recurring EBIT.
On slide seven, coming for financial services and retail. In the first quarter, we continue to observe a very positive trend in public debt placements coming from improving improve improving by the market conditions like we saw in the in last in the last quarter of last year in the year and also in the first quarter of this year. Coming also for the success of the digital channel that we are reaching records every month and also coming from the growth and diversification of the savers entering over the over the past year. As a result of this, public debt placements grew by 64% compared with the previous quarter and by more than 400% comparing with the same quarter of last year. We maintain in this area a commercial strategy to diversify our services, mainly coming from health care plans and insurance.
And as a clear example of this success, as you can see, the health plans, we see an increasing of 26% of the number of clients compared with the previous quarter, falling more than 700% of increasing in the in the previous year. This translates in the more than 123% of the revenue to revenue revenue growth, reaching €12,500,000 of of revenue and an increase of 126% in EBIT, reaching six points €6,600,000. We can say on this area, we have continued to have a positive outlook for for the future because public debt going to compare very well against the the savings in in banks. And, also, we are just launching in April the the insurance for SMEs that we felt that we’re going to have a a very good success on on on this product also. Now I pass to Guy, our CFO.
Guy, CFO, CTT: Thank you, Jerome. Starting on page eight where we can see the the bank KPIs, we continue to see growth in business volumes and and revenues in the bank. Business volumes grew 14% in the quarter, and you can see these details in the appendix, but with a very strong progress in off balance sheet and and site deposits that grew 19%. And this drove our revenues, banking revenues, 8% year on year with net interest income increasing 1.1% despite compression in net interest margins. And this good performance in off balance sheet resulting of our partnership, we generally drove commissions 1,200,000.0 year on year.
This this good performance in revenues was offset by the investments in commercial capabilities, both staff and digital channels that are front loaded but will drive future growth in this platform. In the in slide 10, we can see our financial key indicators where we see a stronger than expected first quarter with revenues growing 9.5%, our EBITDA growing 17.2%, recurring EBIT 19 and a half. Our net income declined 25.9%, pressured by specific items that are mainly HR restructuring, 50% of of that amount, real estate phase two transaction costs, and m and a. In slide 11, we can see the the bridge of our revenues where we continue to see E and P driving growth and financial services recovering as expected and guided. In E and P, we grew 23% in revenues.
Volumes grew 15%, although softer than expected, and revenue per unit, weight mix, and value added services driving revenues to to further growth than than volumes. In mail, declining 6% if we include the elections that last year occurred in the first quarter. This year, we’ll have elections again, but but on the second quarter. If we exclude that effect, the mail revenues were flat given a good contribution of business solutions as Juan Sosa highlighted. Financial services with with a very strong performance, a 23% of growth in revenues following the the 1,700,000,000.0 placements in the quarter, and the bank with the gross and volumes driving growth of commissions and and net interest income.
On slide 12, we can see our operating operating costs that grew 8.8%. Express and parcels with volumes driving growth, but but also investments in capacity and and some increase in costs due to sustained quality of service due to some operational costs as Juan already highlighted. Mail and mail mail and others declining 5,600,000.0, mostly the elections effect, but also carries cost with them, namely with the terminal dues with foreign foreign postal operators that accounted for 5,000,000 out of the 5.6. And the financial service is growing 3,200,000.0 completely due to the higher placements of public debt and the bank increasing 2.3% staff and investments in in in digital channels. On slide 13, we can see the bridge of of our EBIT.
Our growth continue to come from express and parcels, and and now with the with this new performance of financial services as expected that now contributes also to our strong growth of 19 and a half percent. We we grew 1,400,000.0 in EBIT. As you recall, seasonality in the first quarter plus this cost to sustain quality pressure margins, but we continue to see high single digit margins for the full year. Mail was pressured by this one off effect of elections that that we’ll see the the flip side of this on the second quarter, But underlying performance was resilient, although with softer volumes in the in the first quarter. Financial service with one 3,700,000 of increase drove by these 1,700,000,000 placements that are above an average year that normally are between one to 1,200,000, and we continue to see resilience of the placements plus the the investments that Jean mentioned.
The bank, we we see stable margins due to the investments in staff and the digital set and the digital in the digital channels, offsetting the the the growth in banking revenues as the bank transitions to a new model of growth with these investments will fuel further future growth in in in the bank. On slide 14, we can see our consolidated free cash flow. The the consolidated free cash flow reflects the seasonal payments in the bank where where where the working capital normally in the first quarter is is pressured. We see an operating cash flow of 7,100,000.0 and a free cash flow of 2,300,000.0. On the next slide, we see the same or similar numbers of of cash flow, but excluding the bank where we can see a strong progress on operational cash flow of 20.5% and also in free cash flow of four 44.7% where where the working capital was still played had a a good performance in the quarter.
Our leverage now stands in 1.7 times, growing from 1.3 last year. If we account for the acquisition of Casseza, this will stand at 2.1 times, so still very below the 2.5 that we impose ceiling that we impose to ourselves and that we expect to to to leverage down as when DHL transaction will be concluded. And with this, I pass you to to Jean Bent for his final remarks.
João Zambujo, CEO, CTT: Thank you, Guy. Before my final remarks, I’d like to to to go through through the the acquisition of Casiesa. I believe we bring good news on on execution for this deal since it it was concluded within the envisage schedule. We will integrate Casieza eight full months of Casieza this year, and that is good news. Also good news on the valuation front because given the the structure of the deal and and and because of good performance of since June, the actual price was a hundred and 6,800,000.0 rather than a hundred and and 3.8, a higher value, but for a much higher assets, which brought the the EV over EBITDA multiple from 5.5 to to 5.2.
So a very good deal from a strategic point of view and an even better price than than when we’ve signed the agreement. Moving to slide number 18, a couple of notes on the integration of Casseza that started immediately. On the organization structure, we’ve decided to keep it as mostly as it stands to maximize know how transfer. On the commercial approach, we are integrating our commercial strategies given that for for relevant customers and integrated offer of customs and sorry. Customs clearance and last mile delivery is very important.
In terms of operational synergies, we started already implementing the synergies that we have devised outside in, and we are now working together analyzing further potential synergies. And, of course, we we are already looking at international opportunities and the international position of Casios aiming at well, finding options for for CDT. And now moving to the last slide, slide 19, my final notes. Starting with the operational performance, operating performance, we we believe that we we we brought another quarter of continued growth in E and P above market growth, which means that we keep growing market share. On mail, we remain focused on on protecting profitability, and we also brought interesting news in spite of expected volume decline.
We’ve been able to offset that as was shown in the previous in the presentation of the business area. Banco CTD showing a continued growth in business volumes and revenues while investing in key platforms, in retail stores and digital channels as was referred by Gee, which will fort foster future growth. And, one of the most relevant aspects of this quarter, a very solid recovery on financial services, with public debt placements, increasing by almost six times. And and, again, let me stress that we we we are now above what would be a normal year and with a good outlook for the year. This generated allowed for generation of solid cash flow, both operating cash flow and free cash flow as already illustrated.
We remain with the with the significant flexibility in our balance sheet even after the acquisition of Casiesa. And let me remind you that this will be offset by the end of the year when we when we close the deal with DHL. This is clearly below our self imposed conservative leverage limitations limits. On on the organic front, again, on CASESA and the and the the execution and and the price, and also to to let you know that we are working actively with DHL for for in in the anti antitrust process, which is an European level process, and we we remain with the expectation that this should be completed in in the in the last quarter of this year. A final word on shareholder remuneration, just to refer that we’ve concluded already after the the closing of the of the quarter.
Our last share buyback at 25,000,000 acquisition, that’s rendered 4.62 4,620,000.00 shares or 3.3% of our capital, bringing the full investment amount of investment in our own company to €67,000,000. And we will pay on the on the May 15 ’17 cents dividend per share in line with last year and in accordance with the the announced dividend policy. We given a significant contribution of financial services and then expected the expansion of our EBIT margin in EMP above that shown last year, we reaffirmed our guidance of more than €100,000,000 of organic recurring EBIT, which I believe is a is a is a strong statement, and and we are fully committed and and and fully confident that we will achieve it. And with this, we’ll remain available for your questions. Of course, myself, Guy, and John Soze.
Thank you.
Conference Operator: We are now available to take questions. As a reminder, analysts that wish to place a question should click on the button to raise your hand, and we will give you access to the microphone. Operator will take our first question from Jean Saffarra from Santander. Please go ahead. Your microphone is enabled.
Jean Saffarra, Analyst, Santander: Yes. Hi. Good morning. Hopefully, you can you can hear me. So I’ll, I’ll have I have two questions.
The I mean, the first just is I mean, actually, I have three. Sorry. The the first one on on the the let’s say, lack of operating leverage in Express and Parcels this quarter, margin was basically flat on above 20% growth. So if you could elaborate a bit on that. And then the second one on Banco CTT, I understand from the presentation that obviously you’re in a growth ramp up stage, of investment in commercial and and the digital capabilities.
My my question here is, I mean, when when should we start, to see or when should the Banco City team resume, EBIT growth, this year? I mean, if you could give some timing there in terms of your expectations on the profile of of cost increase? And then, the last question is, on the impact of the elections. I I’m not sure if this I mean, obviously, you will have a positive impact now, with the elections, though. So also wanted to understand if if you expect more or less a similar impact as last year.
And also if this impact was embedded in your above €100,000,000 recurring EBIT guide? And those are my three questions. Thank you.
João Zambujo, CEO, CTT: I will address E and P and the elections, and and Guy will will answer the the bank. On E and P, in indeed, we we’ve seen a flat EBIT margin. I’ve referred, and we also, I believe, did so. Some operational issues mostly related with capacity increase.
We are still investing on capacity, and I want you to note that, and I will repeat it now, that quality is of utmost importance in this in this, in this business. One of our distinct distinctive, aspects in this business is that we provide more integrated services than our peers, and that we also have a significant high quality in Iberia. And this is this is we see this as crucial. So we didn’t want to jeopardize. We are building a platform for future growth, which is unique, and and sometimes we need to jeopardize that margin to make sure that we in the long run, we do what needs to be done.
And that’s why I also wanted to include the comment in my last note that we see e n E and P margin for this year growing above the number that we’ve shown last year. So we we keep quite confident. We also have let’s let’s assume that, and it was also in my comments, softer volumes than one would expect, although we grew above market. So all in all, there was indeed a a a EBIT margin for E and P, but we we keep very confident on on on on the performance for the year. I will jump to the to the impact of the elections.
So the we are indeed expecting an impact this year similar to that of last year, both in revenues and margin. And by the time we have we have guided, we didn’t know that that there would be an election. And so that that that that is something that will that will be also new. But, yes, indeed, we are expecting roughly the same the same impact both in revenue and and and on margin. And I will now move to Guy for the for the Banco CTC question.
Guy, CFO, CTT: Thank you, Joanne, for your question. We we gathered the market in in in the end of twenty twenty three for for this for these new investment phase of the bank where we’ll transition the growth model to be more lean to to higher income per customer, and that entailed investments in in in capacity, namely commercial capacity, both in digital channels and stuff. That is what we are seeing now in the numbers. So that’s that’s those investments are front loaded. 2025 will be a transition year in terms of of model.
The growth will start with some meaning in 2026. We’ll see growth in 2025, although within the guidance that we gave, that was the 25 to 30,000,000 of pretax’s operational income, but but will be a smaller growth rate than we have seen in the in the last couple of years. That that kind of growth will resume in 2026. And so in 2025, we’ll see growth, but but but but a more stable profile of of profitability as we transition the model. All of this is embedded in our in our guidance that we gave the markets of above 100,000,000 in in organic growth in 2025.
Jean Saffarra, Analyst, Santander: Thank you.
Conference Operator: We’ll now take our next question from Flip Lake from CaixaBank with me. Please go ahead. Your microphone is enabled.
Flip Lake, Analyst, CaixaBank: Hi. Hello, everyone. I have three questions. First one on real estate. If you can give us an update on on the transactions made until today and what is still pending to do and if it will be completed during this year or or next one.
Second question on shareholder remuneration and after completion of the the buyback plan, if you expect to launch new buyback or if at the stock price level, you’d see that, as you mentioned before, there are no additional opportunistic opportunities to buy back in shares. And last one, on specific items, if you expect any additional cost during the rest of the year of $9,000,000 reported in this quarter would be a good indication for full year? Thank you.
Guy, CFO, CTT: Thank you, Philippe. On real estate, to to to it’s twofold of my answer. So first, on on the on the yield portfolio that that is this vehicle that we set up with with with the help of of of Sonae, we concluded the last phase of the transaction. So it it was two phases transaction. The first occurred in the beginning of twenty twenty four, and now we concluded the remaining assets trans transfers to to this to this vehicle.
This was just as re as a reminder, these were assets that remain behind because some legal issues on the transfer that needed to be sold before transferring them to to the vehicle, and that was concluded in the beginning of this year. And for that, we also received further amount of €3,300,000. On the on the on the second half of the portfolio or the the remainder of the portfolio, like I said, We we continue to to to to to to pursue the vacancy of these assets because these are assets that we foresee will remain vacant. So we are taking the operational steps in order to render these these buildings vacant. The biggest one is is it here in Lisbon and something that will happen in the during next year.
And the other is in the North Of Portugal, the biggest one that that will take some more time. After being vacant, we or at the same time, we continue to pursue what it will be the best use for in terms of of development of these assets, and we’ll decide vis a vis the opportunities of the market what what to do in terms of monetization of these assets. But this is aligned with the two to five years that timeline that we guided that will take to to pursue these development opportunities on this second portion of the assets. We continue to have the optionality in the first vehicle to to tap in in more liquidity if we need because we we we still have we we still have 70% of the vehicles, so we continue to have ability to to tap in liquidity if needed that we don’t see presently. Joao, I don’t know if
João Zambujo, CEO, CTT: Yes. On on shareholder remuneration and you buy back, Philippe, what we want to to to stress is that we we have we have provided a dividend policy, which is clear, might eventually eventually be revised this year in in or in the next Capital Markets Day because the company is now significantly transformed vis a vis where we were. And in that statement, we have always said that we remain available for additional remuneration through buybacks. And it goes without saying that buyback is a function of the the the the context and the the higher the valuation, the less obvious the buyback should be. We see a a significant potential for additional valuation, and so we remain with that option available.
There is presently nothing decided at the board level. But let me rephrase. Let me repeat again. We we want to have a stable remuneration through through dividend and an occasional run additional remuneration through buybacks if it’s and when it makes sense. On specific items, Guy will will will will help us.
Guy, CFO, CTT: Thank you, Jerome. On specific items, two two things to be accounted. So the the the transaction costs, we we still believe that will be some related with DHL as we conclude the the we proceed with the with the with the discussion with the with regulators, and we’ll conclude the transaction more towards the end of the year, and that will entail some more transaction costs and some that are linked to with with the closing. And and we continue to see some space to restructure that we feel it’s it’s import it’s imperative to to sustain profitability email. So we’ll have some more 3 to 4,000,000 on the on on restructuring of of of headcount, but but continue to have one to one point five years of payback on on this portion.
The rest will be linked with with transactions. So not as much cost as as we saw in this first quarter, but we see we should see some cost still falling until the end of the year.
Conference Operator: We will now take our next question from Tony Sladish from IS Independent Research. Please go ahead. Your microphone is enabled.
Tony Sladish, Analyst, IS Independent Research: Hi. Good morning. Sorry. Thank you for taking my questions. So on the first one is on the bank.
So the pharmacy is is struggling. You mentioned that it should improve in the coming years or in 2026. Nevertheless, taking consideration that interest rates are coming down, I think that we are now through a very positive moment in terms of banks. So for me, it’s really difficult to understand why the performance is not is not improving. This is more a comment.
I don’t know if you want to share with us what you see. You already mentioned about costs. So, nevertheless, it’s it’s really difficult to understand. Second question is on on nonperforming exposure that is increasing again. Cost of fees is also increasing.
It seems to be auto loans, so I don’t know if you want to to to to explain what’s going on. And last on on the board, I don’t know if the new board is already in place or not. And regarding the express and parcels business, maybe you can explain if we are now going for this kind of lower volumes increasing, lower growth on volumes and higher average prices because is what we noticed on on this first quarter. So price average price is performing very well and and the volume’s not so well. I don’t know if you want also to comment on this.
Thank you very much.
Guy, CFO, CTT: Thank you, Antonio. Well, I will start with the question on the bank. Let’s see. We have this we have we have this dual effect of compression team in interest rates timed with with our cycle of investments. So that’s why we have some more pressure on margins.
Nevertheless, I I cannot relate with the comment that that that that the effect of interest rates won’t affect the other banks. I think in Portugal, we are seeing this. Nevertheless, we remain with with growth in volumes to transitioning to volumes more stable in terms of of margin and stability. On cost of of risk, we see a small pickup. The cost of risk is on 1%, so it’s it it went up from 0.8% last year related without the loans, but nothing that is very worrisome or not not not within the the normal volatility of the risk on this on on this business area.
On
João Zambujo, CEO, CTT: on the on the board, the board is not in place with the fit and proper processes still going on, and we hope that to be to be concluded, well, sooner than later. And, of course, that will be communicated as soon as it as it happens. Coming to your last question, Antonio, of lower volumes plus high prices combination, let me let me stress that we are seeing a strong growth in volumes again. So that’s that’s that expansion of the of the business through volume growth will will continue. The fact that we have this, in this quarter, this, expansion from volumes to to to revenues, as I said before, it’s not only a function of prices.
It’s a function of prices, a function of a higher average rate through consolidation because, while people buy more, sometimes they buy more from the same place and and and then the objects are consolidated or are simply more heavy heavy objects. And also the fact that we are more than anyone else, including services and services like management of returns, customs clearance, and so on. So it is indeed one important aspect of this quarter. We hope that volumes will be growing significantly, and and that effect will probably be not as expressive as it was in this quarter, but still, will allow us to keep exhibiting, EBIT margins that are best in class and above, clearly above the market and everyone else.
Tony Sladish, Analyst, IS Independent Research: Okay. Thank you very much.
João Zambujo, CEO, CTT: Okay. It’s.
Conference Operator: We will now take our next question from Joaquin Masyakiroj from JV Capital. Please go ahead. Your microphone is enabled.
Tony Sladish, Analyst, IS Independent Research: Yes. Thank
Joaquin Masyakiroj, Analyst, JV Capital: you for taking my
question. Just a very quick one. Just regarding Cafesa, now that the acquisition has closed, what can we expect the impact to be from Cafesa this year? If you could guide us a a bit on that, it would be we appreciate it. Thanks.
João Zambujo, CEO, CTT: Thank you, Joaquin. So the the basic numbers of Casias have been disclosed when we we announced the deal. We’ve just we’ve just started, so the deal was closed less than one week ago. As I said, we are already working on on mainly on the synergies and on the commercial front. And so we we we we believe it’s a bit early days to disclose the impact that we expect for the year.
So now the only thing that we know is that’s going to be eight months. And and and and and and in the in the next in the second quarter, we will we will guide on the impacts of CASESA because, of course, by then, we will be much much we will be able to provide a much robust indication. Thank you.
Conference Operator: As a reminder, analysts that wish to place a question should click on the button to raise your hands, and we will give you access to the microphone. And now we will take our next question from Pedro Lovatunj. Please go ahead. Your microphone is enabled.
Tony Sladish, Analyst, IS Independent Research: Good
Pedro Lovatunj, Analyst: morning. So I I think I only have one question on my part. So the question is you had €6,700,000 in the first quarter of expenses in related to strategic projects and restructuring. I assume this is mostly related to Casesa. So my question is what can we expect in the short term in terms of, for example, in the in the second quarter, will there still be any of these kind of expenses?
Or and a bit moving forwards a bit more in the long term if we can expect some from the DHL joint venture? Thank you.
Guy, CFO, CTT: Thank you. As mentioned to Philippe, we we we should expect not as not the same amount, but but more more expenses related with DHL and some with with HR restructuring. We continue to see opportunities to to to restructure in terms of personnel our male division that we think it’s important to sustain profitability. And and we we are expecting to to to to have exits amounts related between 3 and €4,000,000 that have a payback of one to one point five years in terms of of of returns of of those redundancies plus the DHL costs that that I already mentioned. So this is what we should expect until the end of the year.
Pedro Lovatunj, Analyst: Thank you.
Conference Operator: We will now take our next question from Jean Safara from Santander. This is the last question. Thank you.
Jean Saffarra, Analyst, Santander: Yes. Thank you. One last question on financial services. So con considering the what we’ve seen lately on the arrival rates, I wanted to to have your view on the the the run rate in the in the next quarters for on that placement. So are there any competing products out there that would suggest that probably the run rate will decelerate, in the next quarters considering where where the the rates are now or even if they go if they move lower.
So just just if you could share with us some some thoughts on on how do you see the the progression of of financial services that.
João Zambujo, CEO, CTT: Thank you, Joao. So our well, the quick answer is that we we believe that this trend will continue, and there are several reasons for that. One is that we we’ve built, as Jean Souza mentioned in in his presentation, we’ve built a new base a new customer base by introducing the digital channel, and and we we’ve seen that kind of that kind of increase with with some significance. So that is one point. On the other hand, we we see that in in spite of the arrival coming down and the limit now being no longer a a a static limit, the the the difference to to to some deposits and to deposits, it will be will be the same.
So the com competitiveness will be will be significant. On the other hand, with the new government, we we think that also because that was included in state budget, the protection of the competitiveness of this offer will will will continue. And we we keep an expectation that, for example, the the limit per savings account that was that was brought from 50 to hundred million euros will and shall improve because let let me remind you that it used to be 350. And and that was something that was about to happen when when the government fell. So we all in all, we keep, for several reasons, confident that this trend and the contribution of financial services will be will be relatively stable and and certainly very strong throughout the year.
Thank you.
Jean Saffarra, Analyst, Santander: Thank you.
Conference Operator: You. And as there are no further questions at this time, I’d like to hand the call back over to mister, CEO, for any additional or closing remarks.
João Zambujo, CEO, CTT: Thank you. Well, I but I’m just I’d like to thank you again for coming. As as we said, we we’ve provided, we believe, a very decent quarter, And we we we’d like to reaffirm once again that we are very confident that we’re going to achieve the guidance that has been that has been posted for this year, which, let me remind you, is also the guidance that we have provided in our Capital Markets Day, back in 2022, and, and we see the year unfolding, completely in line with that expectation that we will certainly fulfill. So thank you again for coming. We remain, available through our team to to your additional questions whenever you want.
Thank you very much. Good morning.
Conference Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect us.
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