Dutch TNT says Q1 profit up sharply

AMSTERDAM: TNT NV, the Dutch mail and express delivery company, said net profit rose sharply in the first quarter mostly because business customers were spending more on express delivery.

Net profit was euro143 million ($189 million), from euro76 million in the first quarter of 2009. Revenues rose 12 percent to euro2.75 billion.

TNT said the profit rise was also due to cost-cutting and because the quarter had four extra working days compared to a year earlier. It noted that although the volcanic eruption in Iceland shut down European airspace for several days, the impact on TNT was slight.

``In recent weeks, express volumes have almost returned to levels seen in the more normal trading period of Q1 2007, though some customer feedback indicates that this is partially driven by restocking of supply chains,'' said Chief Executive Officer Peter Bakker in a statement.

He said that trend appeared set to continue, but ``because cost increases inevitably follow improving volumes, cost control will remain in sharp focus.''

Operating profit at the company's express arm rose to euro77 million from euro20 million.

Regular mail volumes fell by 9.7 percent, continuing a long slide at the operations of the former state monopolist. TNT is in the process of separating its mail business for a spinoff or sale.

Operating profit at the mail arm rose 20 percent to euro178 million, which TNT said was due to a mix of lower pension costs and lower-than-expected restructuring costs, as well as the four extra working days.