Dutch TPG upbeat despite third quarter loss
TPG, the Dutch-owned post, parcels and supply chain operator, sank to a third quarter pre-tax loss of €16m ($18.5m), thanks to an expected €207m hit from European logistics.
Peter Bakker, TPG’s chief executive, said: ‘Given the economic background, the results delivered by our mail and express divisions in the quarter are outstanding achievements.
‘Although the earnings in logistics are still depressed, underlying performance has been stabilised.’
TPG’s mail division recorded a 13% pre-tax rise to E 163m, despite a 2% dip in quarterly turnover to E 897m. Express parcels, five years ago suffering the same doldrums as logistics, saw pre-tax earning rise 27% to E 47m on quarterly revenues of just over E 1bn.
But in TPG’s third division, there were continuing poor logistics performance in France, Germany, the Nordics and Italy non-automotive.
As a result, TPG swallowed a flagged goodwill impairment charge of E 183m and an asset write-down of E 10m for the third quarter.
However, TPG drew a line under the logistics restructuring by stating that it anticipates no further charges for goodwill impairment or asset write-downs.
The quarter saw E 14m in ongoing logistics restructuring costs that TPG chief financial officer Jan Haars confirmed will total E 65m by year end.
For the quarter, logistics revenues rose 3% to E 909m, but pre-tax earnings fell from E 41m to just E 1m.
Mr Bakker said that Mr Kulik and his team have made ‘good progress’, and the actions taken so far are providing ‘tangible savings’ that will reach E 55m a year by 2004.
The Dutch company says that ‘most business units continue to be affected by low volumes as a result of the continuing weak economic climates, especially in Europe’.
But Mr Haars was keen to emphasise the positive side of the overall group results, excluding the one-off hits from logistics. ‘We are quite pleased with the third quarter results, which may seem a little strange if you focus just on the bottom line.
‘But the underlying story is that our day to day business is doing well, with an 18% increase in net income to E 117m. But at constant exchange rates, the increase was actually 23%.’
