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TNT Express Q4 Loss Narrows, Seeks Divestments

2/18/2013 3:17 AM ET

Dutch package delivery company TNT Express NV (TNTEF.PK,TNTEY.PK), whose $6.77 billion merger offer with United Parcel Service Inc. (UPS) failed recently, Monday reported a narrower loss for the fourth quarter and full year, and said it plans to unveil a comprehensive profit improvement plan next month.

Further, TNT Express said divestment opportunities are sought for Brazil and that the outcome of China Domestic divestment process would be known in the first quarter of 2013.

Bernard Bot, interim CEO said, "The fourth quarter continued to be challenging, with our European results under pressure from weak economic conditions. Our market position in Europe however remains strong, with healthy volume growth and positive customer churn. Asia Pacific showed solid year-on-year improvements, with positive results for the quarter and the year as a whole.''

Loss attributable to equity holders of the parent was 148 million euros ($197.46 million), compared to a loss of 173 million euros last year.

Operating loss was 71 million euros compared to 104 million euros last year. Operating loss margin was 3.8 percent in comparison with last year's 5.6 percent.

Reported revenues slid to 1.86 billion euros from last year's 1.87 billion euros. Adjusted revenue fell 2 percent.

Europe & MEA revenue rose 2.5 percent to 1.18 billion euros and volumes grew, but yields declined in challenging trading conditions. Revenue growth was supported by intercontinental air cargo sales without which, revenue declined slightly.

In Asia Pacific, revenue declined 7.6 percent due to termination of low margin customers and services and continuing weak demand. The business saw lower international volumes, targeted reductions in China Domestic LTL volumes amid India Domestic disposal.

Revenue from Brazil fell around 5 percent to 78 million euros. Adjusted revenues grew more than 6 percent.

For the full year, loss attributable to equityholders of the parent was 83 million euros, sharply lower than the 270 million euros loss in 2011. Annual revenues grew to 7.327 billion euros from 7.246 billion euros in the prior year.

Additionally, TNT Express said it has proposed to compensate the loss out of the distributable part of the shareholders' equity and to pay a pro forma dividend relating to 2012 normalised net income of 0.03 euros per share, out of the distributable part of the shareholders' equity. The proposed dividend represents a payout of 39 percent of normalised net income over 2012.

The firm sees challenging trading conditions in 2013, with related continued negative development of operating results in Europe & MEA. Asia Pacific and Other Americas are expected to perform in line with the prior year, while Brazil is expected to reduce losses.

In the backdrop of the challenging trading environment, the company's management is developing a comprehensive profit improvement plan. This plan, including outlook, is slated to be presented on March 25.

The stock settled at 5.55 euros on Friday.

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by RTT Staff Writer

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