European Mail start up costs impact on TNT profits

Netherlands-based mail and express operator TNT has released its quarterly results showing an increase in revenues but falling profits.

Group revenues increased by 10.0% in the second quarter to reach € 2,689 million. Operating income of € 330 million was slightly (-2.1%) below last year's comparable figure which the company put down to some significant one-off costs. The profit attributable to shareholders was € 244 million, an increase over last year of 16.7%.

Strong revenue growth in Express (+14.1%) was responsible for the Group's revenue increase. Growth in international volumes remained strong at a double digit percentage, whilst domestic volumes developed at low single digit.

Management stated that the integration of the Express acquisitions made good progress, with a marked service quality upgrade in India, the launch of a new truck fleet in China and better than expected results in Brazil. The operating margin of Express remained at 10.1%, excluding the effect of acquisitions.

The negative trend in Dutch addressed mail volumes continued with a fall of 3.5%, with a favorable price/mix effect reducing the impact on revenues. Revenue growth in its European Mail Networks was 33.3% (37.0% for the half year). The operating margin decreased in Mail overall, affected by one-off elements and higher start-up costs in EMN.