TNT EXPRESS said yesterday that tough trading conditions in southern Europe contributed to a €350m (£302m) write-off that pushed the Dutch delivery group to a second-quarter loss.
The company is restructuring to bounce back from the collapse of a €5.2bn takeover by rival United Parcel Service, which was blocked by European regulators in January on competition grounds.
But its express delivery business has been hit by overcapacity and an economic downturn in Europe, with many customers choosing cheaper delivery options, putting pressure on prices.
TNT Express said the adjustments consisted of €296m of goodwill impairments and €53m of fair value adjustments.
About half the goodwill write-offs were due to worsening trade conditions in southern Europe, particularly Italy and France, finance chief Bernard Bot said.
He added that even without the group’s reorganisation, TNT Express would have had to take impairments.
TNT Express reported a second-quarter operating loss of €280m on revenue of €1.7bn.
Adjusted operating income fell 26 per cent to €71m in the second quarter from €97m a year ago, broadly in line with analysts’ forecasts.
Bot said while the outlook for southern Europe was bleak, eastern Europe was doing well.
City A.M. Reporter