TNT records €55m loss for third quarter
Integrator TNT posted a EUR 55m loss for its third quarter, a month after issuing a profit warning regarding the economic difficulties in its core market of Europe. The company said much of the loss attributable to shareholders stemmed from the EUR 50m provision made to pay off French antitrust authorities over claims of collusion with other parcel carriers.
But, though restructuring costs have also hit the bottom line, the markets have not responded well to the company slipping from the EUR 6m profit made in the same quarter last year.
Revenue in the quarter slipped 2% year-on-year to EUR 1.65bn, while operating margins fell from 0.2% to negative 2.9% with operating results down from a EUR 3m profit last year, to a EUR 47m loss this quarter.
Tex Gunning, the TNT chief executive, said the underlying operating result had improved, discounting the various impacts like the antitrust payment and restructuring costs.
In the year to date, TNT’s revenue dropped 4.9% to EUR 4.9bn, its underlying revenue down 3.2% to EUR 5.0bn. Operating income on a reported basis improved 66.2% to a EUR 22m loss, and on an underlying basis improved by 52.5% to 183m.
TNT, which recently dropped the “Express” from its name to reflect the rebranding of its former sister company TNT Post, said it expected operating results in its European markets to stabilise the rest of this year, although forecasts are not entirely clear.
The company announced today a EUR 185m investment in its core European road transport network as part of its companywide transformation programme, Outlook.
The move aims to increase productivity and improve service.
Gunning said: “The new €185m investment in TNT’s European road network that we announce today will improve efficiency and service quality and strengthen TNT’s position as the preferred road delivery service in terms of quality, speed, coverage and value.”
Elsewhere, TNT said it has ongoing investments going into new hubs in Australia, depot modernisation in Italy, its network in the UK and its European hub in Liege, Belgium.
Divisions
Around the TNT divisions, the company’s European core market saw revenue up 1.5% to EUR 788m in the quarter, with operating income flat on EUR 5m.
Other European countries and the Americas achieved a 2.6% growth in revenue compared to the same period last year, but operating income was down 9.1% to EUR 10m.
Revenue was considerably down in the Asia/Middle East division, thanks to the sell-off of the China domestic business. Revenue sank 15.6% to EUR 228m, with operating income flat on EUR 6m.
The Pacific division, dominated by Australia, saw revenue up 4.6% year-on-year, with operating income at EUR 5m, a turnaround from the EUR 1m loss in last year’s third quarter.
Brazil, which TNT changed its mind over selling in the last year, has seen its revenue increase 13.7% in the third quarter, with no operating loss recorded, compared to a EUR 5m loss in the same quarter last year.
