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AMSTERDAM, April 28 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
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
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)