TNT core profit falls 45% in Q2

TNT's quarterly core profit fell 45 per cent, its fourth consecutive year-on-year decline, and the Dutch firm boosted its cost-savings target to cope with weaker demand for delivery services. Europe's second-largest mail and express delivery company after Deutsche Post decided to issue an interim dividend of €0.18 (Dh0.94) per share on the back of strong cash flow, which analysts had anticipated would be a sign of a nascent recovery. The cash or shares dividend payment was a first sign of confidence in underlying operations and dividends would continue if cash conditions remained strong, Peter Bakker, the Chief Executive, told reporters. But he added that tough conditions would continue. "The global economy, and Europe, are still in a recession and we cannot say for sure when we can expect a recovery," he said. Shares in TNT rose to 5.7 per cent to €16.03 by 0851 GMT, an eight-month high, compared with a 0.4 per cent rise in the DJ Stoxx industrial goods and services index. TNT is trading at 13.5 times projected 2009 earnings, while Deutsche Post has a projected price-earnings ratio of 9.4. TNT posted earnings before interest and taxes (Ebit) of €178 million, compared with an average of analysts' forecasts of €184m and €324m a year earlier. Excluding restructuring charges and currency effects, TNT reported an adjusted Ebit of €226m. Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here .