Dutch TNT postal service reports profit slump

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AFP - Dutch postal and courier company TNT reported a 24.2 percent drop in third quarter net profit to 75 million euros (105 million dollars), partly as a result of competition from the Internet.

The figure was lower than a result of 111.4 million euros forecast by analysts for Dow Jones Newswire.

"Good but not great," is how chief executive officer Peter Bakker described the results in a statement -- with "general recovery of activity levels held back by a difficult pricing environment".

TNT said its revenue for the quarter grew 11.4 percent to 2.7 billion euros, but this was "negatively impacted" by costs of 14 million euros mainly for separating the company's two core operations: post and express delivery.

Earnings before interest and tax (Ebit) declined 20.1 percent to 143 million euros.

TNT's courier arm, Express, which operates in more than 200 countries, recorded growth of 9.8 percent in volume by weight and 14.7 percent in revenue to 1.7 billion euros.

For Mail, operating in the Netherlands, volume dropped 7.7 percent, mainly due to the liberalisation of the Dutch postal market last year and "electronic substitution", the statement said.

"TNT continues to prepare for separation of Mail and Express," added Bakker, a strategy announced in August.

The company's share value dropped nearly three percent on the Amsterdam stock exchange to 18.54 euros shortly after the results were announced.

TNT had earlier announced that it would reduce its full-time workforce by 11,000, including 4,500 forced retrenchments -- a figure it has since reduced to 3,100.

"TNT remains actively engaged in discussions with the unions, despite their decision to present the company an ultimatum regarding the restructuring programme," the statement aid.

The company reported "modest improvement in the European economy", but "given that the global economic recovery remains fragile, caution remains warranted".

TNT, which employs about 160,000 people around the world, said it intended to achieve structural cost savings of "at least 200 million euros" in 2010.