TNT Express results in first quarter hit by volume declines

TNT Express warned ahead of this month’s Annual General Meeting that its operating results have been hit by a decline in international express volumes and pricing pressure in Europe so far in 2012. The company issued a trading update prior to the 11 April AGM stating that it has seen “mixed economic conditions” in Europe and slowing Asia-Europe trading volumes since the start of the year.

TNT had been hoping its operating margins in Europe would grow from 8.4% towards 10 or 11% this year, after last year saw revenues growing 2.1%.

Results in the Asia-Pacific region have been under pressure because of reduced volumes, although a strong performance in Australia has helped, said the Amsterdam-based integrator.

The region has had a difficult time since TNT demerged from Dutch postal service PostNL last year, with a profitable 2010 turning into a loss-making 2011 in the Asia-Pacific.

Performances in the Americas region, including Brazilian operations, have been going according to plan so far this year, the TNT trading update added.

TNT Express, which is currently in the process of being acquired by UPS subject to shareholder and regulatory approvals, has a plan in place to reduce the fixed costs of its network by EUR 150m by the end of 2013.

Part of the company’s exposure to excess intercontinental air capacity will be reduced thanks to TNT’s recent code-share agreement with Emirates Sky Cargo.

TNT’s AGM next week will not see any changes of composition being made to the company’s Supervisory Board, the company said, “for the time being”.

In the light of the recommended EUR 9.50-per-share offer from UPS, the company said its Supervisory Board had withdrawn its proposal to appoint Marcel Smits and Sjoerd Van Keulen as additional members.