TNT reports poor first quarter results

TNT has announced its financial results for the first quarter of 2015. It reported revenues of €1,622m, up 1.3% year-on-year, adjusted for disposals and foreign exchange, TNT’s revenues declined by 1.5%. The company also recorded a Q1 operating loss of €11m. Accordingly the TNT’s margin stood at -0.68%.

The drop in fuel surcharges and a trading day effect lowered first-quarter revenues by 2.1% and 1.5%, respectively. The company stated that underlying revenue growth, after correcting for all these factors, was 2.1%.

Reported operating income included €12m of restructuring and other charges. Adjusted operating income decreased to €1m, reflecting €20m of costs related to the execution of the company’s Outlook strategy, lower volumes from international accounts and pricing pressures, particularly in Western Europe.

During the quarter investments increased to €78m, compared with €26m the year before. Most capital expenditures were directed towards sorting equipment, hubs, depots, vehicles and IT. Service performance, measured by on time delivery, continued to improve in all segments.

Tex Gunning, TNT’s Chief Executive Officer said, “Good progress is being made with the execution of the Outlook strategy. Service performance and revenues from SMEs further improved, supported by ongoing investments in infrastructure and IT. During the FedEx offer process, we will continue to focus on our customers and operational efficiency. The first quarter results were impacted by transition costs associated with the Outlook strategy. Our guidance is unchanged: we expect 2015 to be a challenging year of transition, followed by year-on-year improvements from 2016 onwards.”