Boost for TNT as mail strike lures business
DUTCH parcel firm TNT, which is trying to cash in on the disruption caused by the UK’s postal strikes, yesterday posted better-than-expected quarterly results due to cost-cutting and highlighted signs of revival in its business parcels arm.
TNT, which has lobbied the government to allow it to launch a door-to-door postal service to challenge the strike-hit Royal Mail, said third quarter profits dipped 14.4 per cent to €179m (£162m), although margins recovered to nearly match last year’s levels.
The group uses the Royal Mail for the so-called “final mile” of its British postal network, but has been trialling its own door-to-door letter deliveries in several areas including Merseyside, using orange-clad postmen.
TNT said UK business-to-business parcel volumes had increased about 10 per cent in the few couple weeks since the strikes by the Communication Workers Union kicked in, but a spokesman said the rise had come too late to affect the third quarter numbers.
After the operating margin in its Express parcel division dropped to two per cent in the second quarter from 8.9 per cent a year earlier, TNT posted a margin of 5.1 per cent in the third quarter, on par with a six per cent margin a year earlier.
The company cut €128m from costs in the quarter. It has set a 2009 target of €500m and has already achieved €368m of that, the company said.
“TNT in the third quarter has delivered clearly better-than-expected results, primarily thanks to a solid execution of its cost-saving plans,” Petercam analyst Thijs Berkelder said.
The company has been trying for several quarters to improve the profitability of the Express business while attempting to slim down its Dutch mail unit.
“In this quarter, the trading environment has stabilised further, with some early signs of positive underlying developments,” chief executive Peter Bakker said.