TNT Express grows second quarter profits

The Netherlands-based express carrier reported an operating income of 19 million euros for the second quarter of 2015.    TNT Express reported an operating income of 19 million euros (U.S. $21.1 million) for the second quarter of 2015, compared with 3 million euros for the second quarter of 2014. Operating income for the second quarter of 2015 included 22 million euros towards restructuring and other charges.
   The Netherlands-based global express carrier reported an adjusted operating income of 41 million euros for the quarter, down 41.4 percent from the same quarter last year. Profits were influenced by IT transition and Outlook project costs, which are defined as costs designated towards new services and facilities, as well as pricing pressures, TNT said.
   Revenues increased by 6.2 percent to 1.76 billion euros.
   Capital expenditures increased to 96 million euros (5.5 percent of revenues) in the second quarter, compared with 37 million euros (2.2 percent of revenues) from the same quarter last year. The company continued to invest in sorting machinery, vehicles and IT, and is in the process of completing new sorting facilities in Madrid, Eindhoven, Swindon, Brisbane and Melbourne.
   In its international Europe segment, TNT saw adjusted operating income drop 34.9 percent to 28 million euros. The company attributed the sharp decrease primarily to an IT transition, Outlook project costs, and costs associated with introducing new road and air connections. Revenues for the unit increased 5.1 percent to 719 million euros.
   TNT’s international AMEA segment saw adjusted operating income increase to 21 million euros and revenues rise to 257 million euros, up 16.7 percent and 16.3 percent, respectively.
   In its domestics segment, TNT posted an adjusted operating loss of 1 million euros, a drop of 21 million euros from the previous year’s second quarter. The company attributed the decline to pressure of yields and 5 million euros invested towards IT transition and Outlook project costs. Revenues for the unit increased 4 percent to 655 million euros. 
   The company’s unallocated segment, which consists of Other Networks, Central Networks and corporate head office functions, reported an adjusted operating loss of 7 million euros, in comparison to last year’s second quarter, in which it reported an adjusted operating loss of 11 million euros.
   TNT projects the third quarter of 2015 will see restructuring charges between 25 million euros and 30 million euros associated with a potential buyout. FedEx Corp. made a $4.8 billion offer to acquire TNT during the second quarter of 2015 that is still pending relevant regulatory approvals.
   “We have guided that we expect 2015 to be a transition year in terms of bottom-line performance, as we continue to invest in the transformation of TNT,” TNT CEO Tex Gunning said in a statement. “As for the macro economic backdrop, we have experienced some positive developments in Western Europe, but we remain cautious given the economic volatility in China, Brazil, Australia and Greece.”