SANDY SPRINGS (dpa-AFX) - TNT Express NV (TNTEF.PK, TNTEY.PK) reported Wednesday a profit for its first quarter compared to last year's loss, which included Brazilian impairment charge. Revenues increased despite adverse trading conditions in Europe & Middle East Africa.
The Dutch package delivery company, which is in a 5.16 billion-euro deal to be acquired by US rival United Parcel Service Inc. (UPS), expects mixed economic conditions in Europe and lower trading volumes in Asia-Europe to persist in 2012.
Faced with pressure from shareholders to explore strategic options, the company agreed in mid-March to UPS's sweetened 9.50 euros cash per share offer that would create a logistics giant with more than 45 billion euros or $60 billion in annual revenues.
The company said today it is supporting progress towards completion of the proposed offer by UPS and expects to discuss the same with shareholders during an Extraordinary Shareholders Meeting to be held in the third quarter.
Regarding the first quarter, TNT CEO Marie-Christine Lombard said it has been challenging given the ongoing sluggish business environment.
'In Europe, cost savings and commercial initiatives are being pursued to mitigate revenue pressure. Profitability in Asia-Pacific improved, despite weak intercontinental demand. Americas also improved, with better results in Brazil,' Lombard added.
In early April, TNT had said that pricing pressure and declining international volumes have negatively impacted operating results in Europe & MEA since the start of 2012.
In the first quarter, TNT's profit attributable to equity holders was 16 million euros, compared to a loss of 106 million euros a year earlier. Earnings per ordinary share for the recent quarter were 2.9 euro cents. The prior year results included 120 million euros costs mainly related to impairment in Brazil.
Adjusted operating income fell 32 percent and operating margin declined to 1.9 percent from 2.8 percent last year.
Total revenues grew 1.3 percent to 1.82 billion euros. Adjusted revenues at constant FX totaled 1.78 billion euros, down 0.9 percent.
Looking ahead, TNT expects negative trading conditions in Europe & MEA to be balanced by indirect and fixed cost reduction programs and commercial initiatives.
The company also noted it has temporarily adjusted the timing of implementation of certain long-term projects that are part of 2012-2013 fixed-cost savings program, in light of the proposed UPS offer.
In Amsterdam, TNT shares are currently trading at 9.17 euros, up 0.01 euros or 0.11 percent.
Copyright RTT News/dpa-AFX