UPDATE 1-TNT Express income, revenue hit by currency moves

Mon Apr 28, 2014 3:33am EDT

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AMSTERDAM, April 28 (Reuters) - Dutch logistics company TNT Express said it faced uncertain trading conditions in 2014 after it reported a 6.6 percent fall in revenues in the first quarter, when foreign exchange moves put pressure on its results.

Operating income was 17 million euros ($24 million), compared with 219 million euros in the same period last year, including a 200 million euro fee for terminating a takeover deal with rival UPS.

The company was forced to come up with a standalone strategy last year after the European Commission, Europe's market regulator, blocked UPS's 5.2 billion euro takeover offer because of competition concerns.

Revenues stood at 1.6 billion euros in the first quarter, down from 1.7 billion a year ago, falling short of the 1.7 billion forecast by analysts in a poll commissioned by Reuters.

The company reported sharp falls in revenues in its Pacific and Asia, Middle East and Africa regions. The company said Asia results were distorted by the disposal of its China Domestic operations, without which adjusted revenue would have been up 2.9 per cent on nearly flat volumes.

"TNT Express' performance improved this quarter... I am particularly pleased with profit recovery in our core European segments and in Asia Middle East & Africa as a result of our restructuring strategy," Chief Executive Officer Tex Gunning said.

The company said it expected results in Europe and the Americas to improve, and for results in the Asia, Middle East and Africa to be "significantly better" than in the prior year. Results from its Pacific division will remain under pressure.

"Bluntly (results) are about in line if you don't adjust for FX which is an inescapable fact of life," said Damian Brewer, an analyst at RBC Capital Markets. "Costs are now falling faster than revenue decline, but the margins need to move faster given the tax drag on the company."

The company said it expected to complete the sale of the Dutch operations of TNT Fashion, which provides logistics services to the fashion retail industry and had Q1 revenues of 30 million euros, in the second quarter.

($1 = 0.7227 Euros) (Editing by Jane Merriman)

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