TNT today announced moderate Q1 revenue growth and a sharp drop in profits due to a combination ofone-off effects, but stressed its underlying results were satisfactory. Noting that its markets
were stable, TNT reiterated its full-year forecast.The January-March results were negatively impacted by the unfavourable phasing of week one,the early Easter, 2-3 fewer working days, foreign exchange fluctuations and the impact of a highpositive one-off effect in its mail business in Q1, 2007, the Dutch group said.
In Q1, 2008, group revenues increased by 1.8% to € 2.72 billion in real terms, while theunderlying result was a 6.8% rise to € 2.85 billion. The operating profit (EBIT) declined 17.7% to€289 million in real terms, and was 3.4% lower at €339 million on an underlying basis. Net profitwas down 58.1% to €179 million, although the Q1, 2007, figure had included a €195 million profitfrom discontinued operations.
TNT Express increased Q1 revenues by 3.3% on an actual basis to €1.61 billion, which wasequivalent to underlying growth of 10.4% to €1.72 billion. Its operating profit (EBIT) declined18.5% to €106 million in real terms, but was up 8.5% to €141 million on an underlying basis. Theunderlying operating margin of 8.2% was in line with last year’s figure of 8.3%. The core volumegrowth was up 3.3% and the yield improved 5.1%.
The express division’s mature international and domestic businesses and its emerging marketbusinesses all contributed to the underlying 1% revenue growth. International Economy productscontinued to grow faster than International Express and generated strong yields, TNT said.International revenues generated grew faster than domestic revenues, especially in Western Europe.
The emerging platforms increased revenue by 17.2%, including 13.7% organic growth, withstrong results from South-East Asia, Greater China and Brazil that more than offset investmentcosts in India and China.
The Mail division (TNT Post) saw underlying revenues rise 1.4% but EBIT dropped 9.5%, due torestructuring costs and lower volumes.
Describing underlying results as “satisfactory”, TNT CEO Peter Bakker commented: “The firstquarter results came in below last year, all of which is explained by the impact that was foreseenof the unfavourable phasing of week 1, the lower number of working days, Easter falling in thefirst quarter this year, and one-offs in Mail. The impact of Easter in Express has been reversedfully in the second quarter.”
He added: “Although financial markets and global economic contexts remain volatile, TNT sofar experiences market circumstances in line with its outlook as given in February. We see economicactivity in our markets at the same level as in Q4 of last year as indicated earlier. Therefore TNTtoday reaffirms its full year outlook.”
