The pain continues for shareholders in Portugal’s privatised post office, CTT, as the company’s share price today dropped a further 9% in reaction to stiffer targets set by the regulator.
The new performance rules for postal services, announced yesterday by Anacom, have been poorly received in the market and triggered an equally poor day’s trading at the Portuguese stock exchange.
Anacom has set objectives that CTT has to achieve between July 1st, 2018 and the end of 2020. A total of 24 targets have been set to improve slipping service levels.
The CTT share price closed, down 9.25% to €3.494, the biggest drop since November 1st, the day after the company announced a 50% fall in profits and the rot became plain for all to see.
Friday’s fall wiped out gains in recent sessions but the overall picture is one of serious losses for shareholders whose shares were down 27% in 2016 and down 46% last year.
The sale of CTT, under Pedro Passos Coelho's government, yielded over €900 million to the Treasury and was achieved in two stages: in December 2013, the State sold 70% of the company's shares at €5.52 a share, and in September 2014, sold the remaining 30% at €7.25 per share.
The current price of under €3.50 a share reflects market conditions and a board that has failed to respond to reality, yet there has been no suggestion that directors should be replaced.
The president of Anacom, João Cadete de Matos, admitted at a parliamentary hearing that in recent years there has been a deterioration in the overall quality of service at CTT.
"The indicators indicate a generalised deterioration of the figures," said the regulator, adding that he still did not have the data for 2017 but that the 2016 figures had triggered fines.
Manuel Carlos de Mello Champalimaud is the head of Gestmin, which owns 11.6% of CTT, and which has as its objective, "Sustainable growth in the present, with a view to the future." The future looks bleak.