BPost (EBR: BPOST) shares are down 19% on Tuesday on the back of one of those announcements we're simply never happy hearing. Which is that they don't know. They don't know what current revenues are going to be. They're not sure whether their current contracts are even legal under Belgian law. Further, they don't know how much they might have to restate past year figures to make up for what they don't know. This really isn't a good performance and, well, jokes about the Post Office might apply here.
Not knowing what you're doing, not knowing what you've done, is not, not really, one of those things we want to hear from a company. No, not even the Post Office where we rather expect less than perfect knowledge and efficiency.
BPost share price from EuroNext
The specific problem is that BPost has scrapped full year guidance. On that basis that it just doesn't know. In more detail:
“The preliminary results of these compliance reviews, which remain ongoing, revealed that bpostgroup's margins on certain services provided to the Belgian State may not be acceptable under applicable law. This is expected to result in a material financial impact for bpostgroup.
As a result, bpostgroup withdraws its full-year 2023 financial guidance.
Preliminary estimates, pending further legal and financial analysis, indicate an adjusted EBIT impact on the full-year 2023 financial guidance, in relation to the performance of these services in 2023, in the range of 25-50 million euro.
bpostgroup is currently not able to provide more detailed information, in particular on the impact in relation to past revenues, pending further legal and financial analysis.”
They don't know whether they've been following the law. They don't know how big a problem this is. They don't even know the impact on their own past recorded results. This is not a good announcement, let us leave it mildly at that. We think it unlikely there will be an immediate recovery from this.
