(Reuters) - The Dutch government has turned down a request for financial support by national postal service provider PostNL to help keep its services running, news agency ANP said on Friday. PostNL
Dutch government rejects PostNL request for financial support
By Alessandro Parodi and Bart H. Meijer
(Reuters) - The Dutch government has turned down a request for financial support from national postal service provider PostNL to help keep its services running, it said in a statement on Friday, sending the company's shares lower.
The Ministry of Economic Affairs said it was exploring measures to support postal services, and did not want to take any irreversible steps before parliament and regulators had decided on a way forward.
PostNL shares fell over 4% in early trading in Amsterdam.
The company had earlier requested the government provide a temporary financial contribution towards universal service obligation costs of 30 million euros ($31.5 million) in 2025 and 38 million euros in 2026.
"Temporary or definitive measures that PostNL is requesting, like government support, are not being considered at the moment," the ministry said.
But the company, which delivers parcels and letters across the Netherlands, Belgium and Luxembourg, insisted its request for support was driven by necessity and had a clear legal basis.
"This does not align with the level of diligence we are accustomed to from the ministry," a company spokesperson told Reuters. "We expect the minister to make a (well-substantiated) decision based on the law."
The group cut its 2024 profit forecast in January for a second time, citing an "unsustainable" business model.
Net debt rose 28% to 592 million euros in the third quarter, and the company posted a loss of 21 million euros in the same period.
The Europe-wide USO directive requires letters and parcels to be delivered within five days throughout each member state which can be costly.
Traditional postal services in Europe, some of which are facing financial pressures, are struggling to keep up with competition from other parcel locker firms such as Poland's InPost and Amazon.
($1 = 0.9531 euros)
(Reporting by Alessandro Parodi and Bart Meijer; Editing by Rachna Uppal)
