TNT Express NV swung to a loss in the fourth quarter and projected tougher competition in its major markets to persist during the year ahead.
The Dutch logistics company reported net loss of €137 million in the three months to December compared to a positive result of €32 million a year ago. Operating performance stood at €53 million below the zero mark compared to €79 million on the opposite side during the same period of 2013.
During the quarter the company took several charges, including €70 million related to restructuring, €32 million to goodwill impairments and €22 million in costs for the re-launch of the TNT brand.
Chief Executive Tex Gunning said in a statement that 2015 would be “a year of transition” and projected that it will achieve “year on year improvements from 2016 onwards.”
The company also projected adverse trading conditions this year, particularly in Western Europe.
TNT has been struggling to deliver higher earnings since its failed acquisition deal by United Parcel Service, the worlds largest package-delivery company. The €5.16-billion deal between to two companies was rejected by European antitrust regulators in 2013.
Following the break-up TNT undertook a restructuring program and started reducing costs, outlining efforts to keep its customers amid weakness in European markets.
However, even as Europes overall situation improved the company has benefited slightly from the change as TNTs management have previously warned.
Revenue in the quarter was down to €6.68 billion versus €6.90 billion in the prior year.
Additionally, TNT projected restructuring costs to range between €250 million and €300 million for the 2015-2017 period, including €10 million to €15 million in the first quarter of 2015.
Capital expenditure is projected to land between €800 million and 900 million for 2015 to 2017. The company also hopes to achieve a net cost reduction of €125 million by 2018.
“We are still in a stage of improving the quality of our revenue base and winning back customers that were lost over the last few years,” said Mr. Gunning.
He also believes that the companys European road, in which TNT invested heavily, and competitive air network will play a key part of achieving profitable growth.
TNT fell 2.29% on Monday and closed at €5.94 in Amsterdam. On Tuesday the stock plunged 10.13% to €5.34 at 12:54 GMT, marking a one-year decrease of 20.73%. The company is valued at €3.26 billion.
According to the Financial Times, the 18 analysts offering 12-month price targets for TNT Express have a median target of €5.37, with a high estimate of €7.50 and a low estimate of €3.90. The median estimate represents a 9.70% decrease from the last closing price.
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