TNT reports revenue rise of 3.5% in 2015

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A TNT Boeing 747 Freighter unloads

TNT has reported that revenues rose 3.5 per cent to 6.9 billion euros ($7.7 billion) in 2015, which was an increase on the 6.6 billion euros in 2014.

Operating income was 38 million compared to an operating loss of 86 million euros in 2014. Progress was made on many fronts, the Dutch express courier says.

TNT explains it returned to revenue growth despite economic volatility in some of its markets, notably Brazil and China, while revenues from small-medium sized enterprises (SMEs) grew at 5.1 per cent, accelerating as the year went by.

Underlying revenue growth in the largest segment, international Europe, gained momentum quarter by quarter.

In the fourth quarter (Q4) of 2015 revenues were 1.86 billion euros, up 4.1 per cent year-on-year, up on Q4 in 2014, when revenues reached 1.78 billion euros.

The operating income in Q4 was 57 million euros, compared to an operating loss of 53 million euros in the same period of 2014.

TNT says revenues in Q4 benefited from foreign currency effects and from a working day effect, but were negatively affected by lower fuel surcharges. Excluding all three items, underlying revenue growth was three per cent.

The improvement was due to higher revenues and volumes overall, particularly from SMEs. Revenue growth in Europe more than offset the decreases in Brazil and China the company explains.

TNT’s chief executive officer, Tex Gunning says: “I am very pleased with our Q4’15 results. The implementation of the Outlook strategy is gaining momentum. We saw growth accelerating, particularly in our International Europe express business, and we realised a significant improvement in operating income.

“Service has improved noticeably, as evidenced by record customer experience scores. We are quickly making up for the lost ground in operational excellence by accelerating capital expenditure and outsourcing our Global Business Services and IT infrastructure.

“We expect further year-on-year improvements in adjusted operating income in full year 2016. Good progress has also been made towards closing of the FedEx offer to acquire TNT. Pre-integration planning is well on track and we are all looking forward to a bright future with FedEx.”

Looking forward, TNT says it expects continued economic volatility in some markets outside Europe, especially in Brazil. TNT anticipates restructuring charges of about 10 million euros in the first quarter of 2015.

FedEx is set to takeover TNT for 4.4 billion euros, and the deal has been cleared by competition authorities in the European Union, US, and Brazil. Both integrators expect to close the offer in the first half of this year.