TNT’s quarterly income drops as EU awaits concessions on deal

City A.M. Reporter
TNT Express, the Dutch mail delivery group being bought by UPS said yesterday that third-quarter profit fell 12 per cent.

The company also repeated that it expected EU Commission approval for the deal.

UPS, or United Parcel Service, is not expected to complete the €5.2bn (£4.3bn) acquisition until early next year after the European Commission expressed objections.

TNT Express reported operating profit at the low end of expectations in the third quarter, down 12 per cent to €38m on sales of €1.8bn.

Forecasts were in a range of €30m to €91m, with most at the lower end of that range.

TNT said it booked €51m in provisions in the quarter, €19m of which was for claims in Brazil. Operating losses in the Americas eased from €30m a year earlier to €23m.

The European Union’s antitrust chief has said UPS and TNT would have to offer concessions to secure regulatory approval for the deal.

A merged UPS and TNT would have a quarter of the European express services market, ahead of DHL Worldwide Express BV with 19 percent, according to analysts at Bernstein Research.

The European Commission is scheduled to decide on the proposed merger by 15 January next year.

Analysts had already warned that the deal would give UPS a dominant position in some markets, including the UK, and that as a result it would have to sell assets to soothe regulatory concerns.