Bpost stock rises 10 per cent after investigation into malpractices
Shares in Belgian postal company Bpost rose more than 10 per cent when the stock market opened on Monday. The stock plummeted in April following revelations of malpractices in public contracts, but is now recovering after the company reported that the remedial costs would be much lower than analysts had estimated.
The company announced the results of an internal investigation into malpractices in public contracts after market hours on Friday. Investors reacted with relief on Monday, as the compensation provisions outlined in the report were lower than analysts had expected.
The investigation was launched after the company revealed in April that it had discovered irregularities in public contracts. Following the announcement, the company's share price plummeted by 18.7 per cent to its lowest level ever.
The recent internal investigation showed that the government had overpaid for three services provided by Bpost: processing of traffic fines, management of government bank accounts and delivery and deletion of number plates.
Bpost, which is 51 per cent owned by the Belgian state, is booking a provision of 75 million euros to repay the government. It is now up to the government to determine whether it agrees.
The report also indicates that the company expects a negative impact on adjusted operating profit of 10 million euros, significantly lower than the 25-50 million euros estimated in April.
© BELGA PHOTO SISKA GREMMELPREZ
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