Portugal's CTT says profit up on savings products, parcel service

LISBON Wed May 7, 2014 1:33pm EDT

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LISBON May 7 (Reuters) - Portugal's recently privatised postal service CTT posted a 1.3 percent rise in first-quarter profit as operating revenue stabilised after years of declines, financial services sales rose and after it cut jobs and costs.

Net profit rose to 18.1 million euros ($25.2 million), up 1.3 percent from a year ago, CTT said on Wednesday. Operating revenue edged 0.3 percent higher to 176.4 million euros, despite a drop in regular mail traffic.

The company has reduced its staff by 5 percent to 12,235 employees by not replacing those who retired, and operating costs dropped 0.7 percent to 143 million euros.

Revenue from express delivery and parcel service rose nearly 4 percent, while financial services brought 20 percent more than a year ago, it said. CTT's financial services include sales of savings products such as Treasury certificates.

CTT said it would analyse the possibility of setting up a postal bank in detail in the current quarter, "within the framework of various initiatives for the expansion of financial services", and that the board should make a decision in the third quarter.

Just before the privatisation last year, the Bank of Portugal issued an authorisation for CTT to set up banking services if shareholders opt to do so.

CTT shares closed down 0.5 percent lower at 8.09 euros before the results were announced but still outperformed the broader market, which was down 1.7 percent.

Its shares debuted on the Lisbon bourse in December after an oversubscribed stock offering at a price of 5.9 euros.

The privatisation process was part of a sale of state assets required as a condition of Portugal's EU/IMF bailout, which ends this month as the economy recovers and Portugal made a successful return to the international bond market. ($1 = 0.7183 Euros) (Reporting by Andrei Khalip; editing by Jane Baird)

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