TNT posts higher profit on express unit recovery

Dutch postal and express company TNT reported a larger-than-expected rise in first-quarter net profit on the back of cost savings and a recovery at its express unit, and said its markets are set to improve this year, the Wall Street Journal reported.

Chief executive Peter Bakker said that although the global economic recovery remains fragile, he assumes a modestly improving business environment in 2010. He added that the company will continue to focus on cash and costs as it expects higher express volumes, revenues and results to be tempered by continuing yield pressure and cost inflation. Volumes and results at its mail unit are expected to be below 2009 levels.

Net profit for the first three months of the year rose 88 percent to US$190.4 million from $100.1 million a year earlier, as sales rose 12 percent to $3.6 billion, mainly due to volume recovery at its express unit.

Like rivals United Parcel Service and FedEx in the US, TNT was hard hit by the credit crisis and resulting economic downturn that crimped consumer spending and global trade. However, there are signs that a recovery is now underway.

TNT had hinted in early April that profit would improve at both its express and mail units. The company's express unit saw sales rise 19 percent, while revenue at its mail unit rose four percent.

(Source: Cargo News Asia)