Tag: TNT

Chinese courier companies struggle to deliver

Posted by | Jul 30, 2008 | |

With fuel costs continually on the rise, China’s private delivery companies are among the hardest-hit sectors reporting declining profit margins and witnessing increasing pressure from major international couriers as they increase efforts to make inroads into China’s domestic markets.

Pushed by the dismal outlook in the delivery industry – costs have been driven up by 16 percent since fuel prices were raised in late June – private couriers in China are struggling to swallow the losses before any price hike becomes possible.

FedEx Corp has readjusted its delivery rate scheme in China since June. The charge for overnight express delivery has been cut from 34 to 18 yuan per kg from Shanghai to Beijing, which is much lower than the 30 yuan offered by local players such as SF Express.

The price cut, which is unusual given foreign courier’s higher operational costs compared with domestic competitors, is indicative of FedEx’s determination to compete in China’s express delivery market, said An Jianghong, an analyst from Anbound Group, a consulting firm headquartered in Beijing.

Shanghai-based China Business News also reported last June that FedEx chief financial officer Alan B. Graf had said that FedEx’s launch of its mail express service in China would have a “negative impact” on the company’s 2008 fiscal revenue.

In another bid to try to tap into China’s delivery business, FedEx is to open its Asia-Pacific hub in Guangzhou in December this year. The company said in a public announcement earlier that the relocation of the hub from the Philippines to China is based on the estimates on the growing demands for air express in the region.

Other rivals are also keeping up. Following last year’s acquisition of Tiandi Hoau, a Heilongjiang-based private express company, TNT is now set to build an extensive road transportation network in China with the launch of its new Asia road network, which is a new service route that connects China and Southeast nations via road transportation.

This network is expected to be extended into China’s hinterland as the company continues its investment in Tiandi Hoau to upgrade its operational infrastructure and delivery capabilities, analysts say, which will help the foreign courier strengthen its networks within China and expand into second and third-tier cities within the country.

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TNT 2nd quarter performance

Posted by | Jul 28, 2008 | |

Group
• Operational revenue growth 7.5 pct
• Operating income resilient
• Strong operating cash flow
Express
• Operational revenue growth overall 10.7 pct; core volume growth 6.9 pct
• Sudden pressure on volume growth in June; recovering somewhat in July
• Sharply increasing fuel costs in quarter; time lag effect costs EUR 7 million
• Strong growth in Emerging Markets at 18.3 pct
• Operating income at constant fx up 5.3 pct
Mail
• Emerging Mail & Parcels operational revenue growth at 15.6 pct
• Operating income robust, but under pressure from expected volume declines and higher salary costs
• Agreement with unions on collective labour agreement
Outlook
• Full year 2008 expected to develop within outlook range, albeit at low end
• Express cost savings programme EUR 100 – EUR 125 million announced; fully realised in 2010
• First indication cash generation programme; EUR 300 – EUR 400 million by end 2009 from real estate and working capital
CEO Peter Bakker comments:
“The second quarter of 2008 has seen a shift in trading volumes in Express. In April and May the volumes in Europe were in line with the preceding quarters, but in June we have experienced a slow down in the premium Express volumes in Europe. The sharp rise in fuel prices during the quarter and the general economic outlook have impacted both our customers and us. The resilience of TNT is however best demonstrated by the fact that the volumes in our European Road Network have continued to grow throughout the quarter and in June. Also our emerging market activities in Brazil, China and India, with the connecting lanes to Europe, have all shown double-digit growth.
In Mail the results were robust. Volume declines were at the expected levels, with substitution in letter mail being the main driver. It was pleasing to see that after a long negotiation period the Unions and TNT Post have agreed a new collective labour agreement and avoided a national mail strike. This agreement creates the framework for more market conform labour conditions, through a separate Production labour agreement. The short term impact of the CLA has seen an increase in wage costs that contributed to the expected decline in the operating margin at Mail in Q2.
The quality and mix of our network, combined with cost saving programmes as announced today, give me confidence in our performance, also under more difficult circumstances. The development in Brazil, China and India, continue to show the differentiating nature of our strategy is working.”

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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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Hino hybrid and TNT express win transport awards

Posted by | Jul 22, 2008 | |

Australia’s first hybrid eco-truck has swept the field in the annual Transport Awards.

PowerTorque magazine presented Hino’s hybrid with the 2008 Technology and Innovation award.

And it recognised TNT Express as the first major courier and parcels delivery company to actively pursue the introduction of eco-friendly transport.

TNT Express has put 10 Hino Hybrid trucks on its national fleet.

TNT Express determined that the Hino Hybrid diesel electric hybrid emits 14 per cent less carbon dioxide than a conventional diesel engined truck of equivalent size.

The company estimates the saving will average 1600 kilograms of CO2 a year per vehicle.

Hino has committed itself to actively promote hybrid as a viable transport resource, especially in urban and suburban deliveries.

The company has spent more than two years promoting the concept in Australia and is now gearing up for a roll-out of new models.

The Hino Hybrid can shut down its diesel engine when the vehicle is stopped and smoothly restart when it is time to move off.

The vehicle captures energy generated under braking and returns it to special batteries for later use in the hybrid system.

TNT Express has further added to the green credentials of its 10 Hino Hybrids.
It has fitted special, strong polypropolene bodies for weight saving and recyclability, and a roof spoiler designed to cut wind drag during travel on many of the 80km/h ring roads which service major cities.

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