TNT shareholders voice disquiet over performance
In October 2011, TNT reported that whilst trading was relatively resilient in Europe, Middle East & Africa (EMEA), a worsening product mix had negatively impacted the Q3 2011 operating performance. This was due to customers trading down to lower value products. It also said that Asia Pacific profitability had suffered from continuing weak Asia-Europe demand, leading to ’sub-optimal capacity utilisation‘ in a soft pricing environment. However, the main problem lies in the company’s Brazilian subsidiary and a turnaround operation is presently on-going.
The problems are clear from the company’s income statement. In the year to date 2011, TNT achieved operating profits of €287m in its EMEA region. This compared with a loss of €29m in Asia Pacific and €96m in the Americas.
The Wall Street Journal report quotes one of TNT’s shareholders calling directly for the removal of TNT’s Chief Executive, Marie-Christine Lombard and her replacement with someone who has experience, effectively, of grooming the company for sale. TNT is periodically linked with two of its major competitors, UPS and FedEx, as it would provide a European road freight footprint which both are lacking. There are other options too, potentially emanating from Asia Pacific or from the private equity sector.
In some respects a falling share price (TNT’s has dropped by about a half since its demerger) will make a sale more likely – although this won’t help shareholders who have seen their stakes diminish in value. TNT’s management, it seems, will have to quickly demonstrate that its plans to deliver improved profitability are working or risk further shareholder discontent.
Quelle: eyefortransport
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