TNT Express NV (TNTEF.PK,TNTEY.PK) said Monday that pricing pressure and declining international volumes have negatively impacted operating results in Europe & Middle East Africa since the start of 2012. The Dutch package delivery company, which is in a 5.16 billion-euro deal to be acquired by U.S. rival United Parcel Service Inc. (UPS: Quote), also amended its agenda of the 2012 Annual General Meeting amid the impending deal.
Providing a trading update, the company said it has continued to experience mixed economic conditions in Europe and slowing Asia-Europe trading volumes. Strong performance of the Australian operations has benefited Asia-Pacific results, despite pressure from lower Asia volumes. Americas' performance has been in line with the prior year, with Brazil performing according to plan, the company said.
TNT has initiated a fixed-cost optimization program aiming to reducing fixed costs by 150 million euros by the end of 2013. TNT also noted that the recently signed code-share and block-space agreement with Emirates Sky Cargo will reduce its exposure to fixed intercontinental air capacity as of second quarter.
In mid-February, the Europe's second-largest package delivery company reported a loss for the fourth quarter, reflecting weaker economic conditions and impairment charges at its Brazil operations.
TNT, which has been facing pressure from shareholders to explore strategic options, on March 19 agreed 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 deal is said to be the largest ever by UPS in its history, giving it an edge over its rival FedEx Corp. (FDX) in Europe.
Amid the intended offer, TNT said its Supervisory Board has reviewed the Agenda of the AGM 2012, which will be held on April 11. Among the changes, the Board has withdrawn the proposal to appoint Marcel Smits and Sjoerd Van Keulen as additional board members.
Regarding the dividend, TNT said the proposed 0.004 euros per share final dividend 2011 can be paid without any adjustment of the offer price, while any additional dividends would need to be deducted from the offer. The board also decided not to pay an interim 2012 dividend. If the offer is not successfully completed, a dividend would be proposed for the full year.
Also, the board decided to suspend the 2012 grant of rights on performance shares under the Executive Board's Long Term Incentive plan.
In Amsterdam, TNT shares are currently trading at 9.25 euros, down 0.01 euros or 0.11 percent on a volume of 310, 937 shares.
by RTT Staff Writer
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