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TNT Experiencing Mixed Fortunes In UK Strike - November 3, 2009
[The Telegraph.]TNT, the Dutch-based postal business and biggest private mail operator in Britain, is experiencing mixed fortunes in the Royal Mail strikes as it wrestles with labour troubles in its home market.
Its express business is picking up customers in Britain but its postal operation is suffering because it depends on the Royal Mail for final delivery.
TNT, one of the mail business eager to take a stake in Royal Mail before the Government about turn on a partial flotation, believes it will end up benefiting from the disruption in Britain.
Henk van Dalen, chief financial officer, said that while the strikes were creating difficulties in the short-term "in the long-term customers might switch to TNT because they think Royal Mail isn't reliable".
He was speaking after TNT announced its fifth successive fall in quarterly profits amid signs that cost cutting and improvements in its express business are helping the group to turn the corner. Third-quarter net profits of €99m (£89.4m) were down 12.4pc on year earlier on turnover 7.6pc lower at €2.48bn but both sets of figures beat analysts' forecasts.
Mail volumes continued to suffer from more competition resulting from liberalisation of the home market business. TNT has achieved €368m of the €500m it wants to save from cost cutting this year but is struggling to finalise a new labour agreement covering cutbacks in its mail business.
One deal has already been rejected although Mr van Dalen is hopeful of avoiding a Royal Mail style confrontation and concluding an agreement by the end of the year.
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