TNT today announced strong Q1 growth for its express business and stable mail profits along with ahigh net profit rise due to proceeds from the sale of its freight management business.
Group revenues grew by 9.1% to EUR 2,676 million in the first three months, and operatingprofit rose 7.3% to EUR 351 million. Profits from its continuing operations (express and mail)improved by 8.8% to EUR 234 million, while discontinued operations (freight management) generated aprofit of EUR 195 million. In all, profit attributable to shareholders more than doubled, up 108%to EUR 427 million.
TNT Express increased Q1 revenues by 12.3% to EUR 1,621 million, including 8.4% organicgrowth and 4.6% due to acquisitions. Its operating profit rose 8.3% to EUR 130 million,leaving the operating margin at 8%. The main areas of organic growth were intra-continental flowswithin Europe, emerging markets and special services. Revenue yield rose 0.9% thanks to highervalue international traffic, TNT said.
In Europe, TNT Express increased revenues by 8% to EUR 1,283 million. Growth was driven bycross-border business in western Europe and revenue growth in Germany and Benelux, but the domesticbusinesses in the UK and France came under pressure.
In the Rest of the World, revenues grew 32.5% to EUR 338 million. Organic growth was 11.7%,with double-digit rises in emerging markets and a single-digit increase in Australia. Theacquisition of Mercurio in Brazil boosted revenues strongly.
TNT reiterated that it expects full-year Express revenue growth of about 15%, includingdouble-digit organic growth, and an operating margin in the 9% to 10% range.
The Mail division increased Q1 revenues by 4.5% to EUR 1,059 million, operating income (EBIT)rose 4.1% to EUR 231 million, partly due to a property sale, and the operating margin was stable at21.8%. European Mail Networks (EMN) increased revenues by 41% to EUR 230 million, including 25%organic growth generated in the UK and Germany, and further acquisitions in Germany.
Mail Netherlands revenues declined by 1.6% to EUR 657 million, with positive price effectsfrom higher parcel volumes and stamp price rises mostly offsetting a 4.3% drop in addressed mailvolumes. TNT is in talks with unions over a new EUR 370 million cost saving plan due to commence in2008.
For the full year, TNT expects Mail revenue growth “in the mid single-digit range”, with anoperating margin of around 17%. EMN is forecast to increase revenues by 25% and generate a “lowsingle-digit” operating margin.
On plans to fully liberalise the Dutch domestic market in January 2008, CEO Peter Bakkersaid: “The discussions on the postal law in the Dutch Parliament have not yet been finalised. TNTconsiders it important that the postal law content and the related liberalisation process remainconsistent with the original proposals that were submitted to Parliament last year.”
