Dutch post and courier company TNT Express on Monday posted a tenfold jump in net profit for the first quarter, but results were primarily driven by compensation for a failed takeover deal with US parcel giant UPS.
Net profit totalled 144 million euros (188 million dollars) as opposed to 15 million euros the same time last year, even though sales fell by 4.5 percent to 1.67 billion euros.
TNT Express said profits were boosted when rival United Parcel Service paid a 200 million-euro termination fee after it pulled out of a mega deal in January.
Both UPS, the bidder and TNT Express, the target, worked hard to get the 5.16 billion euro takeover past European Union authorities, but UPS withdrew when it became clear that anti-trust officials were set on blocking it.
Brussels officially pipped the deal on January 30 saying it would have restricted competition when it came to the express delivery of small packages in 15 EU member states.
UPS then paid TNT Express the 200 million euro fee agreed upon by the two groups in advance, should the deal fail.
TNT Express in March announced it was shedding 4,000 jobs over the next three years as it restructured after the UPS bid’s crash.
“We reiterate our view that trading conditions in 2013 will continue to be challenging, especially in Europe,” TNT Express chief executive Bernard Bot said in the statement.
He said the impact of the group’s extensive restructuring programme — including a new management structure and sales of its operations in China and Brazil, should become visible towards the second half of the year.
UPS and TNT Express are major players in the sector for delivery of packages and are two of four firms with a comprehensive air and road delivery network on the continent.
Others present in Europe are DHL, owned by Deutsche Post, and FedEx, a US-based company.
TNT Express operates in more than 200 countries and maintains a leading role in the road freight network in Europe. It currently employs some 77,000 people.
TNT Express posts profit after failed UPS deal
