TNT’s fourth quarter results will be hit by the combined impact of severe weather and strikes,the company said today.
The company, which will release its Q4 and 2010 results on February 21, also announced changesto how the financial results of the Express and Mail businesses will be presented.
In a business update, the Dutch group said that its Express operations in Europe were negativelyimpacted by exceptionally adverse weather conditions in December. Notably, TNT’s Liege hub was shutfor two days, with disruptions to service lasting longer. The estimated negative impact on Expressdivisional EBIT is €15 million. In Brazil, additional integration-related costs due to claims andprovisions impacted Express divisional EBIT by an estimated €20 million.
Adjusting for these two effects, Express expects full year 2010 divisional EBIT in line withprevious indications, TNT said. Currently, Express does not foresee a negative effect on thepreviously guided 2011 EBIT range of €420-440 million (excluding the allocation of around €20million of central head office costs).
In Mail, the estimated impact of strikes and adverse weather conditions on Q4 2010 divisionalEBIT is around €10 million but full-year 2010 performance is expected around prior indications, TNTsaid.
There have recently been some positive developments in the Dutch postal environment, it added.These included union members’ ratification of the agreement by which Mail can move forwards inimplementing its restructuring programme. Moreover, there will be a move towards marketconsolidation with the planned acquisition by rival Sandd of Deutsche Post-owned Selektmail.
Regarding financial reporting, TNT plans to separate the Express business as a listed companyfrom TNT NV, which would retain the Mail business. As a result, presentation of the 2010 resultswill change, with Express reported under discontinued operations, changes in the scope of theExpress and Mail businesses and various pensions figures. To explain the reporting changes, on 21February 2011 TNT will publish a reconciliation from the ‘new’ Express and Mail group to previous, ‘ old’ divisional Express and Mail results format.
The analysis of the year-to-date Q3 2010 underlying results, which corrects for variousnon-recurring items as assessed by management, shows that the allocation of Other networks andcertain Non-allocated costs to Express leads to a limited change in the underlying Express resultsshown. Changes for Mail’s underlying operating income as a result of an equivalent analysis arealso limited, TNT said.
