TNT Express hails improved result in first half
TNT Express cut its losses during the first half of the year, but sales have fallen 6% while the company continued its restructuring programme. The company issued its latest financial results today showing that the first six months of the year have seen revenue falling 6.3% to EUR 3.27bn.
The EUR 159m loss seen in the first half of 2013 has been turned into a EUR 1m profit for the period, while reported net profit (attributable to shareholders) improved to a EUR 3m loss for the half.
The company said its revenue was affected by currency and the disposal of China Domestic and the Dutch fashion logistics business, and excluding those factors would have increased by almost 1%.
TNT Express said its adjusted revenue fell by 2.6% in its core European market during the first half, to EUR 1.59bn, but adjusted operating income grew 10.7% to EUR 83m.
The company said that while revenues have been broadly flat, there was recovery in operating incomes in all European units except UK Domestic, where competition has affected results. The Italian market also remains “challenging” despite the company’s efforts to end unprofitable contracts.
In the non-core European areas and Americas, TNT Express saw adjusted revenue up 5.4% year-on-year in the first half, to EUR 587m, with adjusted operating income up 50% to EUR 36m, as the company repositions itself towards more profitable customers.
Revenues were down 0.9% in the Pacific area in the first half, to EUR 164m, with the area just about breaking even, a slight improvement on a EUR 1m operating loss in the first half of 2013.
There was an 18% drop in revenues in the Africa, Middle East and Asia segment, to EUR 450m, as the company sold off its China Domestic business.
Excluding that impact, the region would have seen revenues up 6.3%, TNT said. Profitability has improved in all units in the region, with adjusted operating income up 40%.
TNT Express said its Brazil Domestic business, which was separated out ready for sale last year, before the company had a change of heart, has improved revenue 11.3% in the first half of this year, to EUR 168m. A EUR 14m operating loss seen last year’s first half has been turned into EUR 2m operating income.
Commenting on the latest quarter, TNT Express chief executive Tex Gunning said the company’s restructuring and cost-saving programme, Outlook 2016, remained “on track”.
“This quarter we were pleased to report adjusted net income up by 36.7% and deliver profit improvements in Brazil, AMEA and certain parts of Europe. However we are experiencing uneven economic growth across Western Europe and see competitive pressures in some of these countries continuing,” he said of the company’s performance.
