Jan 20 (Reuters) - PostNL's chief executive

called for "urgent" government action to safeguard the Dutch

postal service on Monday, after the group warned on 2024 profit

partly due to what she called an unsustainable business model.

Shares of the postal operator fell as much as 8.4% in early

trading, nearing their all-time low seen in March 2020.

Slow to expand their parcel networks and at times in

financial trouble, traditional postal services in Europe are

struggling to keep up with competition from other parcel locker

operators such as Poland's InPost or Amazon ( AMZN ).

In a statement, outgoing CEO Herna Vernhagen called again on

the Dutch government to ramp up financial contributions as an

inevitable step to "safeguard a future-proof and financially

viable postal service".

Chief Financial Officer Pim Berendsen, who will become the

CEO in April, said during a call with analysts that he expected

the universal service in PostNL's home market to become

structurally loss-making.

"A solution for margins to improve would be to better yield

from bigger customers," he said, adding that different clients

would require different kinds of measures, such as cost cuts and

new pricing strategies.

PostNL will rethink its strategy and focus more on its

international opportunities, he added, with more details to come

in February when it reports its final yearly results.

One of the few European incumbent mail operators without any

state participation, PostNL said its normalised 2024 operating

earnings would be around 53 million euros ($54.64 million) based

on preliminary readings. That was below its earlier forecast of

around 80 million euros, last cut in November.

"4Q24 results disappointed due to an acceleration of

existing trends, with the key driver for the outlook miss being

the higher-than-expected client concentration at parcels in

4Q24," KBC analysts said in a note to clients.

The company, which delivers parcels and letters across

Belgium, the Netherlands and Luxembourg, estimated its annual

free cash flow at about 12 million euros, above the expected

break-even, citing well-executed cash and balance sheet

management.

($1 = 0.9700 euros)