TNT reduces losses in third quarter

TNT Boeing 737-400

TNT has seen its losses for the third quarter reduce slightly from 56 million euros ($61.7 million) in 2014 to 51 million euros this year with revenue increasing by 2.3 per cent.

Revenue for the period increased by 2.3 per cent to 1.6 billion euros. For the first nine months of this year revenue is up by 3.3 per cent to five billion euros from 4.9 billion in 2014. Losses for the year have increased to 70 million euros from 55 million euros in 2014.

Despite the loss, TNT chief executive officer, Tex Gunning is optimistic because of the progress made with FedEx’s planned take over of the Dutch courier, which should clear in the first half of 2016, and upgrading IT infrastructure. Gunning says: “Substantial progress has been made in the recommended acquisition of TNT by FedEx: TNT shareholders have approved the resolutions of the extraordinary general meeting. We have been informed by the European Commission that it will not issue a statement of objections.”

He continues: “At the same time we remain focused on executing our Outlook strategy to transform and turn TNT around. Revenue growth from SMEs [small and medium enterprises] continued in the third quarter … Our investments in IT and productivity are on track.”

TNT’s international Europe revenue was up by 4.4 per cent to 693 million euros but it made a loss of two million euros compared to a profit of seven million euros in the third quarter of 2014. It says the loss was due to transition and project costs of Outlook. The Outlook strategy focuses on three pillars, which it calls: focus on profitable growth, invest in operational excellence and organise to win. The costs of expanding Nordic services and the strength of the US dollar increased costs.

International Asia, Middle East and Africa revenue increased by 6.1 per cent to 242 million euros, which TNT says is because of favourable currency effects. Operating revenue increased to 11 million euros from seven million euros. This comes despite TNT saying revenue being affected by a drop in Chinese exports. It also says it transported fewer but heavier consignments.

TNT says it expects 2015 to be a challenging year as it upgrades and opens new facilities, and carries out transformation projects, such as outsourcing IT.