Dutch TNT announces job cuts as profits drop
Dutch logistics group TNT announced a 60.1-per cent drop in fourth quarter net profit to 59 million euros amid the global economic crisis and said it would cut about 1,000 jobs in 2009.business Updated: Feb 17, 2009 03:30 IST
Dutch logistics group TNT announced on Monday a 60.1-per cent drop in fourth quarter net profit to 59 million euros amid the global economic crisis and said it would cut about 1,000 jobs in 2009.
It would also cap dividend payments and managers bonuses, the company said, as falling mail volumes caused net profit for 2008 as a whole to drop 43.6 per cent to 556 million euros from 986 million euros in 2007.
"The extremely tough trading conditions we saw for our Express business in the second half of 2008 are continuing into 2009 so far," chief executive Pieter Bakker said.
"For 2009 we target cost cuts up to 400 million euros in all of our activities ... as we weather this major economic downturn."
The company said in a statement that it planned to save 51 million euros in making redundant about 1,000 jobs world-wide and decommissioning part of its air fleet.
Also, it has decided not to increase the base salary of the management board, to "significantly reduce the maximum bonus pay-out", and to cap long-term incentive compensation.
"These adjustments will reduce the total remuneration significantly compared to the 2007 policy level (25-35 per cent for the CEO; 15-24 per cent for the other members of the Board of Management) as well as compared to the 2008 capped levels," TNT said.
The company said its management board had decided not to distribute a further cash dividend over 2008, but to propose a stock dividend instead.
"As a result, the dividend over 2008 will be 34 cents per share being the already paid interim dividend in cash. Together with the proposed stock dividend to be paid out of distributable reserves the total proforma dividend relating to 2008 will thus be 71 cents per share."
The company had intended to pay a 2008 dividend of 85 cents per share.
"TNT expects the severe pressure on the global economy to persist in 2009," said Bakker.
"The first weeks in 2009 have shown a volume decline in International and Economy express products of 23 per cent and 14 per cent respectively."