Tag: Europe

TNT shares fall as Q2 disappoints on Express volumes

Posted by | Jul 28, 2008 | |

Shares in TNT NV fell on Monday as the Dutch postal group said it expects full-year 2008 organic growth and operating margins to come in at the low end of its guided range as it reported worse-than-expected second quarter results.

Net profit fell to 205 million euros from 244 million euros, missing estimates of 224 million to 232 million, while EBIT was 324 million euros, down from 330 million last year and below estimates of 339 million to 352 million.

‘The sharp rise in fuel prices during the quarter and the general economic outlook have impacted both our customers and us,’ TNT chief executive officer Peter Bakker said in a statement.

TNT said the full-year 2008 is expected to develop within its outlook range, albeit at the low end.

It had earlier guided for Mail to show a low single-digit organic sales growth, with an operating margin around 16.5 percent.

At the Express division, TNT previously said it expects high single-digit organic sales growth in International & Domestic, with a low double-digit operating margin.

Shares fell almost 11 percent in morning trade before recovering slightly.

Divisionally, the Express division reported EBIT of 153 million euros up 1.3 percent from 151 million last year.

TNT said it saw a sudden slowdown in air volumes in June, but CEO Bakker said in a press conference that the decline was less strong in the first couple of weeks of July.

At the Mail division, EBIT fell to 173 million euros from 181 million, due mainly to volume declines in the Netherlands, where TNT expects volumes to decline by 3 percent to 4 percent per year until at least 2012.

Bakker also downplayed that TNT might make acquisitions of its own, telling journalists that the company’s strategy can be deployed on a standalone basis led by organic growth.

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TNT 2nd quarter results

Posted by | Jul 28, 2008 | |

TNT NV slumped as much as 11 percent after second-quarter profit fell short of analyst estimates and it said 2008 earnings will be at the low end of a forecast range.

The shares declined as much as 2.61 euros to 21.37 euros in Amsterdam after TNT said today net income dropped to 205 million euros (USD 322 million), or 55.9 cents a share, from 244 million euros, or 63 cents, a year earlier. Profit missed the 224 million-euro median estimate of seven analysts surveyed by Bloomberg. Sales rose 4.5 percent to 2.81 billion euros.

TNT experienced slowing growth in deliveries of air express packages as customers moved to cheaper road-based options, amid soaring fuel prices, echoing trends at competitors such as United Parcel Service Inc. The strength of the euro against other currencies hurt profit by 7 million euros. TNT said 2008 earnings will be at the “low end” of its outlook as Europe’s economy soften.

The Dutch company’s stock rose 30 percent in the previous two weeks on media reports that FedEx Corp., the second-largest U.S. package-shipping company, might buy the company. FedEx was in preliminary talks to buy TNT, the Financial Times said July 12. The two companies had “low-level” talks about a takeover recently, though the discussions didn’t lead the U.S. company to make an offer, the Wall Street Journal reported last week. TNT and FedEx declined to comment on the reports.

TNT shares were down 2.21 euros, or 9.2 percent, to 21.77 euros at 12:36 p.m.

Chief Executive Officer Peter Bakker declined during a news conference today to comment on the reports. He added that the Dutch company would review any “serious” takeover proposal.

TNT reiterated a forecast that the express division’s Dutch and international operations will generate “high single-digit” sales growth this year, excluding acquisitions, and that earnings before interest and taxes as a proportion of sales will be in the low double-digit percentage range. Mail-unit revenue will rise by a low single-digit percentage, also excluding takeovers, producing an operating margin of about 16.5 percent, TNT said, repeating earlier targets.

“The sharp rise in fuel prices during the quarter and the general economic outlook have impacted both our customers and us,” Bakker said in the statement.

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New book on postal economics

Posted by | Jul 28, 2008 | |

Will postal services be the infrastructure of the 21st century? This is the question asked in a new book published by the UPU, and presented to delegates at the 24th Universal Postal Congress.

This book, which is the work of economists Joëlle Toledano, Chair of the UPU’s Postal Economics Group, and a member of the French Electronic Communications and Postal Regulation Authority, and Jose Anson of the International Bureau, broadens the terms of an economic debate which has hitherto focused overwhelmingly on the Posts of industrialized countries. The five chapters of the book provide a global overview of the factors driving the growth of postal markets, and some possible positive developments in the future.

At a press conference held last week to review the state of the worldwide postal sector, Jose Anson identified four challenges facing the postal sector in developing countries:

First, the switch from fee-paying delivery to delivery entirely at the sender’s expense: in many countries, particularly in sub-Saharan Africa, addressees’ mail is delivered not to their door, but to a rented post office box. Besides the fact that addressees should not have to pay to receive their post, this system tends to be detrimental to services like the water and electricity companies, as their bills cannot be delivered to all their customers by post. What is more, this system holds back the development of addressing systems which benefit not only Posts, but also other essential bodies, such as the emergency services.

Second, the move from an administrative to a commercial approach: postal operators should abandon the administrative principle in favour of a customer-focused approach.

Third, the physical infrastructure remains essential in the 21st century: as electronic services grow more and more important, one might think that postal services had become obsolete. However, it should not be forgotten that it is not physically possible to send parcels and money via the Internet. The postal infrastructure, with its 660,000 post offices, has a significant advantage in being able to use its network to implement a whole series of development policies, from offering financial services to people without access to banking services, to facilitating trade for micro, small and medium-sized businesses.

Finally, the importance of a regulatory framework: the presence of a very large number of players sharing in a market without clear regulation can be a significant brake on market development in a country, hence the importance of a regulatory framework that is sufficiently clear to make delivery economically viable.

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Royal Mail unveils details of GBP 1.2bn IT spend (UK)

Posted by | Jul 28, 2008 | |

Royal Mail has lifted the wraps on how it plans to spend up to GBP 1.2bn on IT-related projects over the next three to four years as it fights growing competition from rival delivery services.

Robin Dargue, the group’s Chief Information Officer and Technical Director, told Computer Weekly that a robust IT and logistics infrastructure will allow the company to develop new markets. “Adding IT content to products and services increases their value,” he says.

The crux of Royal Mail is its capacity to deliver the right item to the right person, Dargue says.

This is particularly so in addressing the opportunities offered by the burgeoning online retail sector, which is worth GBP 4.5bn and is set to grow to GBP 28bn by 2011, according to research firm IMRG.

Royal Mail is supplying up to 25,000 Intermec wireless handheld terminals to delivery staff to record customers’ confirmation of the delivery of packages.

It is also installing mail sorting equipment, mobile handsets, delivery vehicles and online systems so that staff and customers will be able to track and trace each item in the system.

Dargue says “flats” – A4 magazines, catalogues and brochures, make up about one in six items of the typical daily mail bag. Royal Mail is installing high-speed sorting machines from Solystic to handle flats at its Langley plant near Heathrow.

It has also ordered upgrades from Siemens for integrated mail processors (IMPs), and replacements from Solystic for automated mail sorters. By March 2008 it had replaced the codemark printers that print machine-readable instructions on mail to speed sorting. So far, it has upgraded 21 IMPs.

Royal Mail hopes these improvements will give it an unequalled logistics system that it can offer to customers in central and local government as well as business.

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Postal workers to become mobile Post Offices

Posted by | Jul 26, 2008 | |

Poste Italiane is rolling out a mobile postal service using Italy’s postmen and postwomen. The new service which has already been trialed in Rome, allows customers to top up their mobile phones, send registered mail items and order prescription medicines.

Using a hand-held device, postal workers can even print receipts and the scheme is expected to be adopted throughout most of Italy over the next few years. One advantage of the concept is the ability to track registered letters along the route which it is thought would also work well for legal documents such as court papers.

It is hoped that more services can be added to the scheme over time, once the support structure is in place. The postal prescription service will connect patient, doctor, and pharmacist, making the ordering and delivery of prescription medicines a snap. Whilst it is not expected to replace post offices, the service should prove popular for smaller transactions and is another example of Italy’s drive to modernise the post office network.

Norway Post introduced a door-to-door alcohol service via the post office network in February this year and Royal Mail is already investing in tracking and scanning devices in the UK to improve existing delivery services. It is thought that postal delivery workers in the UK could offer similar services to those being developed by the Italians, and in a liberalised postal market, all postal operators are keen to look at ideas that would offer a commercial advantage as well as protecting the future of postal networks in a declining letters market. The Italians seem to be leading the way.

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