TNT Express posted lower revenue and operating income in the first quarter on a mix of adverse currency movements, the sale of its domestic Chinese business and the pruning of unprofitable contracts.
The Dutch global logistics group’s revenue shrunk 6.6 percent to €1.6 billion ($2.2 billion) from €1.72 billion ($2.4 billion) in the same period in 2013, with the steepest declines in the Pacific region.
Operating income slumped to €17 million from €219 million a year earlier, which included a €200 million termination fee from UPS after the European Commission blocked the U.S. firm’s $5.2 billion agreed takeover offer.
Adjusted operating income was €51 million, against €21 million a year ago.
TNT is the fourth-ranked express delivery company. It has been losing market share to the top three — UPS, FedEx and DHL Express, a unit of Germany’s Deutsche Post —which had prompted the takeover deal with its larger U.S. rival.
Revenue fell sharply in the Pacific and Asia, Middle East and Africa markets, but TNT said it achieved “substantially better” results in its core European market and in the Americas. The troubled Brazilian business, which TNT had sought to sell, broke even during the quarter.
“TNT Express performance improved this quarter,” CEO Tex Gunning said. “I am particularly pleased with profit recovery in our core European segments and in Asia, Middle East and Africa as a result of the restructuring initiatives taken since last year.”
TNT Express has been pursuing a stand-alone strategy, focusing on more profitable markets, disposing of noncore businesses and cutting costs following the collapse of the UPS bid. It was the world’s 26th largest transportation and logistics company in 2012, with revenue of $9.42 billion. Revenue declined last year to €6.69 billion ($9.23 billion).
The company said trading conditions remain volatile and uncertain amid risks of a continued negative currency impact. It expects a positive performance in Europe and the Americas and “significantly better” results in Asia, the Middle East and Africa, but the Pacific region will remain under pressure.
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