TNT beats 4Q estimates as it focuses on costs

TNT reported better-than-expected operating profits and said it would focus on costs and improving yields to counter fuel costs as it prepares to spin off its express unit from its mail division.


Europe's second-largest mail and delivery firm after Deutsche Post said that it saw a mostly stable economic environment but would look to make savings to tackle lower mail volumes and inflationary pressures.


"The various yield measures announced as of the second quarter have begun to show positive effects (in express), although the harsh winter weather in Europe has caused not only additional costs but also negatively impacted express's product mix," TNT chief executive Peter Bakker said.


TNT is separating its lucrative express division from its moribund mail unit, hoping it can attract a buyer for the latter that is willing and able to squeeze value from its operations in the face of ever-decreasing postal volumes.


The mother company will retain mail and a 29.9 percent stake in express. On Monday it reported earnings with its express unit under discontinued operations, though some numbers were provided under the old accounting structure to allow comparisons.


Fourth-quarter underlying earnings before interest and tax (EBIT) in mail fell 19 percent to US$252.97 million and in express rose 4.9 percent to $146.31 million. Analysts polled saw on average $247.50 million and $110.49 million respectively.


This year's split will bring TNT closer to its postal services routes, which date back to the 18th century, when it was established as a Dutch state operator after cities relinquished their role as postmasters to the Prince of Orange.
(Source:http://www.cargonewsasia.com)