STRONG 2nd QUARTER LEADS TPG TO 1ST-HALF REBOUND
TPG, the Netherlands-based postal, express and logistics group, said strong second-quarter earnings led to marginal growth in the first half of 2002.
Second-quarter net income from continuing operations improved 22.9 percent to 145 million euro ($143 million), leading to first-half result of 288 million euro ($284 million), up 0.7 percent. Including gains on the sale of non-core businesses in 2001, total net income rose 17.9 percent for the second quarter while falling 9.7 percent for the half.
Operating income rose 16.3 percent for the second quarter to 257 million euro ($254 million) while declining 7.2 percent in the first half, to 512 million euro ($505 million).
'The economic environment was as tough as expected, affecting many markets in which we operate,' said Peter Bakker, chairman and chief executive officer. 'Nevertheless we have performed well in the second quarter, producing a solid 9.7 percent growth in earnings and, in particular, a very strong cash flow performance which has allowed us to reduce net debt by over 200 million euro.'
TNT Express saw earnings rise 66.7 percent in the second quarter to 65 million euro ($64 million) and 46.6 percent in the first half to 107 million euro ($106 million). Revenues rose 5.8 percent in the second quarter, to 1.10 billion euro ($1.09 billion) and 5.3 percent for the first half, to 2.17 billion euro ($2.14 billion).
TPG credited a focusing on business-to-business customers, cutting time from processes and a focus on network cost management for TNT Express' results. Reorganizing the network of air operators resulted in a 5-million-euro one-off gain in the first half.
TNT Express saw improvements in earnings in all areas, most notably France, Germany, Benelux, Asia the Americas and Australia. The company said it cut first-half losses in Australia and 'is on track for some break-even weeks in the fourth quarter of this year.'
Logistics earnings were down 10.0 percent for the second quarter, to 45 million euro ($44 million) and down 2.3 percent for the first half, to 83 million euro ($82 million), due to underlying market conditions.
Margin declines were blamed on underlying market conditions, declines in volumes on existing contracts, slower than anticipated business development and lower utilization of warehouse capacity on multi-user networks in the United Kingdom, France and Italy. The operating margin improved in North America due to strong cost and contract portfolio management, TNT said.
However, TNT Logistics added new contracts with annualized revenue of 314 million euro ($310 million)) in the first half, including a major six-year contract recently signed with Michelin in North America. About 89 million euro ($88 million) in renewed contracts nearly offset 100 million euro ($99 million) in terminated contracts.
Revenues improved 3.6 percent for the second quarter, to 852 million euro ($841 million) and 8.2 percent in the first half, to 1.67 billion euro ($1.65 billion).
Organic growth was achieved in the United Kingdom, France, South America, Asia and Australia. North America revenues fell year on year although the rate of decline slowed in the second quarter. Much of the lost revenue was due to elimination of low-value-added freight management business.
TNT Logistics said it expanded its network through acquisitions or joint ventures in the Nordic region, France and China.
Mail earnings improved 3.2 percent in the second quarter, to 195 million euro ($192 million) and 4.0 percent in the first half, to 413 million euro ($408 million). Revenues rose 2.6 percent in the second quarter, to 959 million euro ($946 million) and 5.1 percent to 1.97 billion euro ($1.94 billion) in the first half.
TPG's board of management said that, despite the uncertain world economic climate, it expects net income from continuing operations to grow 5 to 10 percent for calendar year 2002.