Deutsche Post Shares Tumble on Delay to Higher Postage Rates

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)

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