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TNT Express Slips To Loss; Remains Mute On UPS Offer


Dutch cargo delivery firm TNT Express NV (TNTTY.PK,TNTFF.PK) reported Tuesday a loss for the fourth quarter, reflecting weaker economic conditions and impairment charges at its Brazil operations. The results come shortly after the company had rejected a $6.43 billion takeover offer from United Parcel Service Inc. (UPS). Although TNT did not mention anything about the offer today, reports indicate it is seeking a bid higher than UPS's 9 euros per share offer.

CEO Marie-Christine Lombard cautioned that the year 2012 will be challenging, given the uncertain economic environment, though he expressed confidence in realizing the company's medium term growth and profit ambitions.

The company also plans to reduce its exposure to fixed intercontinental capacity by divesting, subleasing or capacity sharing and intends to explore partnerships for domestic activities Brazil and China.

In the fourth quarter, net loss attributable to equity holders was 173 million euros, compared to a profit of 4 million euros in the previous year. On a per share basis, loss of the recent quarter was 31.8 euro cents.

Operating loss was 104 million euros, compared to an operating income of 24 million euros a year ago. Lower Europe & MEA results and losses in Americas (Brazil) led to a decline in operating income, the company said. During the quarter, the company incurred 104 million euros in additional impairment charges related to value assessment in Brazil.

Revenues for the quarter improved 2.3 percent to 1.87 billion euros from 1.83 billion euros in the same quarter last year. At constant currencies, adjusted revenues were up 2.1 percent. The recent quarter revenue development reflects nearly flat Europe & MEA revenues and slowing Asia Pacific growth, the company noted.

For the medium term, the company aims Europe & MEA revenue to grow organically and through new initiatives in adjacent market segments, with operating margin increasing to 10-11 percent assuming normal economic conditions.

TNT Express also said it aims to reduce fixed costs by 150 million euros by end of 2013 as per its optimisation programme in Europe & MEA.

The board has also decided to propose a final dividend of 0.004 euros per share, payable either wholly in ordinary shares or in cash, to shareholders of record on April 17, 2012, from May 7.

In Amsterdam, TNT Express shares are currently trading at 9.98 euros, down 1.93 percent.

by RTTNews Staff Writer

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