Bruce Barnard, Special Correspondent | Jul 30, 2012 9:31AM EDT
TNT Express, the Dutch package delivery company being acquired by UPS, boosted second quarter operating profit by 67 percent to 77 million euros ($94.7 million) from 46 million euros ($56.6 million) a year ago on higher revenue and reduced costs.
Sales were up 1.7 percent at $2.25 billion and net profit jumped tenfold to $49.2 million.
TNT said it expects “increasingly challenging” conditions in Europe and Asia-Pacific for the remainder of the year.
Earnings before interest and taxes in Europe slipped 14 percent to $108 million in the second quarter, while the Asia Pacific region rebounded to a $19.7 million profit from a year earlier loss of $9.8 million. The Americas unit, blighted by a botched integration of two Brazilian acquisitions, narrowed losses to $28.3 million from $55.4 million.
“In Europe, good volume growth underscores the strength of our diversified product portfolio,” CEO Marie-Christine Lombard said.
“Cost savings and revenue enhancement initiatives also supported profits. Performance in Asia-Pacific and Americas continued to improve as a result of business development and restructuring measures,” she said.
TNT has targeted a $185 million reduction in fixed costs by the end of 2013, partly by contracting out air freight capacity — Emirates Sky Cargo has absorbed half the payload of its three Boeing 777 freighters — and group administration.
UPS last week reiterated it expects to close on its $6.8 billion acquisition of TNT Express in the fourth quarter of 2012.
European Union competition regulators will rule by Dec. 12 on the takeover, which will create a company matching the European market share of Germany’s Deutsche Post DHL.
TNT didn’t provide any details today of likely divestments to allay EU regulators’ concerns the merged company will have a dominant position in several markets, including the U.K., which threatens to drive smaller firms out of business.
Contact Bruce Barnard at brucebarnard47@hotmail.com.