Little optimism from TNT third quarter
Top line revenue was almost flat for the third quarter, with a 1.3% increase to €1.7bn. Income was hit harder with a 13.5% fall year-on-year to €32m, however underlying figures saw a more dramatic 46.9% fall.
The largest business, European Middle East and Africa (EMEA) Express saw a slight 1.1% growth in revenue, although it also saw a 6.4% fall in underlying profits. There is demand growth in the business, notably in areas such as Eastern Europe and there is what TNT calls a "reasonable pricing environment". Volume and demand growth is hovering around 1%. The problem in this business is the shift towards ‚Economy‘ services and away from International Express services; leading to lower utilisation within the Express network.
More problematic is TNT’s Asia Express business. This saw falls in revenue of 7.8% year-on-year whilst on an adjusted basis the business made a loss of €9m. The problem here is soft demand, with the number of consignments falling by 3.3% and pressure on rates between Europe and China. However, Chinese domestic demand was able to expand its higher-margin day definite offering. This business will look to ‚adjust capacity‘ possibly by selling one of its aircraft.
The Brazilian business remains in intensive care with revenue down 8.8% year-on-year and the business making a loss of €32m for the quarter. The core problem of a lack of customers has yet to be remedied fully; although TNT says it has an encouraging pipeline of new customers.
As ever, TNT’s near-term outlook prominently features cost-cutting. However, the company is looking for the EMEA Express business to achieve a margin of 8-9%. The Asia Express business operating result will continue the trend of the first half which appears concerning, whilst the negative performance of Brazilian operations is "being addressed through a full range of corrective measures".
Quelle: eyefortransport
Portal: www.logistik-express.com