Deutsche Post Shares Tumble on Delay to Higher Postage Rates
October 31 2018 - 10:55AM
Dow Jones News
By Patrick Costello
Shares of Deutsche Post AG (DPW.XE) fell Wednesday after a
German regulator issued a ruling that temporarily restricts higher
postage rates from going into effect next year.
The Federal Network Agency said current postage rates would
remain valid beyond Dec. 31, 2018, as the German postal service
failed to submit information on its cost structure justifying
higher rates.
Deutsche Post shares were down 4.2% to 27.35 euros ($31.08) at
1420 GMT.
"We had to take this step because Deutsche Post did not
sufficiently provide proof of their modified costs and savings as a
result of their turnaround situation," said Jochen Homann,
president of the Federal Network Agency.
The Federal Network Agency is Germany's regulator for the postal
service, telecoms, energy and railway industries which aims to
guarantee fair competition and affordable prices for consumers.
Deutsche Post announced in June it would undertake a series of
restructuring measures to cope with falling profits. Still, the
information the company submitted to the regulator as part of a
procedure for determining future postage rates was "not adequately
precise and comprehensible" with regards to the restructuring, said
the agency.
The regulator ordered Deutsche Post to submit additional data on
its cost and margin forecasts. A final decision on new postage
rates will then likely be made during the first half of 2019, it
said.
Write to Patrick Costello at Patrick.Costello@dowjones.com.
(END) Dow Jones Newswires
October 31, 2018 10:40 ET (14:40 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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