CTT - Correios De Portugal, S.A.

CTT reported first-half 2026 revenue growth of 6.3%, with organic growth also at 6.3%. EBIT declined 8.4%, while CEP EBIT grew 5.4% and CEP organic revenue growth was 21.2%; e-commerce volumes grew almost 21% organically and 24% overall. Mail & Services Q2 revenue was EUR 127.9 million versus EUR 130.4 million last year, but recurring EBIT rose 37.3% to EUR 9.6 million and margin improved from 5.4% to 7.5%. Banking revenues rose 7.4%, recurring EBITDA in the bank eased from EUR 5.6 million to EUR 5.2 million, and ROTE was around 12.1%. Free cash flow was EUR 31 million in Q2, and net debt ended at EUR 292.8 million with leverage at 1.8x. For 2026, management guided recurring EBIT of EUR 105 million to EUR 110 million for the core business excluding non-CEP/e-commerce activities, and EUR 115 million to EUR 125 million overall, assuming flattish Banco CTT recurring EBIT, continued strength in Mail & Services, good Financial Services, and high single-digit CEP volume growth for the full year.

Guy Pacheco said the core business remains healthy, with CEP and Mail & Services showing strong momentum and DHL JV synergies validating the e-commerce strategy. He repeatedly framed Cacesa/customs weakness as temporary and tied to a regulatory transition, including de-minimis changes, Madrid-specific rules, and supply chain re-routing. His tone was confident but cautious on visibility, especially for customs, and he highlighted active cost, workforce, and profitability actions plus disciplined capital allocation.

Joana Freitas emphasized stronger growth in business volumes across the bank, with deposits, off-balance savings, and the loan book all posting double-digit growth, while banking revenues increased 7.4%. She said recurring EBITDA in the bank slipped from EUR 5.6 million to EUR 5.2 million because the business is being reinvested for future profitability, and she noted ROTE of around 12.1%. On a consolidated basis, she highlighted revenue growth of 11.7% quarter-on-quarter, free cash flow of EUR 31 million in Q2, improving working capital trends, and net debt down to EUR 292.8 million with leverage at 1.8x. She also pointed to the reduction in costs in Mail & Services, the impact of fuel inflation in CEP, and the operational cash flow improvement from Q1 to Q2.

Analysts focused on whether Cacesa weakness would persist, how sustainable the strong Mail & Services EBIT was, why other revenues rose, and what the unsolicited nonbinding offer for Banco CTT meant strategically. Management said customs volumes were hurt by pre-emptive re-routing and lower marketing from Chinese platforms ahead of de-minimis, but expects normalization later in the year, while warning that the November fee still creates risk. On Mail, management said profitability is being helped by savings placements, business solutions, pricing/mix, and cost reductions, and sees the improvement as reasonably sustainable. On Banco CTT, they confirmed an unsolicited nonbinding offer, said they are evaluating strategic alternatives with a financial adviser, but did not disclose more.