TNT sees Q3 profit drop of 24%
TNT reported a profit slump of 24% during the Group’s third quarter, but said plans to separate its mail and express businesses remain on track. The Group made a profit of EUR 75m, compared to EUR 99m for Q3 2008.
Operating income stood at EUR 143m, a drop EUR 36m year-on-year, whilst the underlying total was reported to be at EUR 157m (EUR 187m).
Despite of the fall, TNT said that its plans to separate its mail and express businesses were still on track, as planned for January 2011.
In its Express arm, underlying revenues increased by 8.2% to EUR 1.6bn. There was also a growth in underlying operating income (EUR 74m, previously EUR 68m)
The company said there was a strong volume growth in Express; above 2007 levels (core kilos +9.8% versus Q3 2009).
The Mail arm of the business saw underlying revenues increase by 5.6% to EUR 1.01bn.
Addressed mail volumes in the Netherlands declined by 7.7%, in line with global trends.
Underlying operating income dropped to € 83m (€ 114m in Q3 2009) due to a distorting impact of pension expenses, the company said.
The company said that managerial and organisational separation of Mail and Express will proceed as planned in January 2011.
A spokesman said there had been a “modest improvement” in the European economy, “however, given that the global economic recovery remains fragile, caution remains warranted”.
TNT’s CEO Peter Bakker said: “Business conditions in Q3 have generally followed the trends we experienced in the first half of the year – good but not great – with a continuation of the general recovery of activity levels held back by a difficult pricing environment.
“In Express, volume growth continues to be strong. We continue to focus on the successful implementation of multiple yield-improvement measures, the full benefits of which will however not be felt until next year. Meanwhile, the business continues its focus on containing costs, including investing in own capacity to reduce intercontinental linehaul costs on the back of recent contract wins.
“Mail’s quarter was characterised by further electronic substitution and continuing competitive pressure. Key to Mail’s future is the successful implementation of the final restructuring programme, which lies at the heart of Master plan III. For this reason, TNT remains actively engaged in discussions with the unions, despite their decision to present the company an ultimatum regarding the restructuring programme.
“TNT continues to prepare for separation of Mail and Express in conjunction with the fulfilment of the Vision 2015 strategy. The internal managerial and operational separation of Mail and Express is fully on track to be effective on 1 January 2011.”
The company also said it continues to actively engage with Dutch unions in relation to restructuring plans.
