TNT Express’s first quarter revenue shrank 4.5 percent to 1.67 billion euros ($2.2 billion) as the Dutch parcel delivery company scaled back international operations to focus on its core European market in the wake of a collapsed takeover bid by its larger U.S. rival United Parcel Service.
Operating profit grew to $300 million from $70 million in the first quarter of 2012, but this was largely due to $260 million compensation from UPS for pulling the $6.8 billion takeover in early 2013 following objections by European regulators.
Volumes grew in Europe, the Middle East and Africa, but yields declined “in still-challenging conditions.” Asia-Pacific consignments declined because of targeted reductions in large customer volumes and weak demand.
TNT said its Brazilian business, which it is seeking to sell, continued to reduce losses. It sold its domestic Chinese trucking company, TNT Hoau, in March.
The company said recently announced cost-cutting measures would impact results in the second half of the year. It plans to cut 4,000 jobs, or about 6 percent of the work force over the next three years and shrink its international air cargo capacity, to achieve annual cost savings of $286 million by 2015.
Bernard Bot, interim CEO, said trading conditions in 2013 would continue to be challenging, especially in Europe.