CORRECTED-PREVIEW-TNT's Q3 fortunes tied to recovery, restructuring

By Greg Roumeliotis AMSTERDAM, Oct. 30 (Reuters) - Dutch logistics company TNT NV is expected to post its fifth consecutive quarterly profit decline on Monday as it adapts slowly to a competitive environment abroad and attempts to restructure its domestic operations. Investors will be looking for signs that Europe's second-largest mail and delivery company has made progress on improving the profitability of its express business while attempting to slim down its Dutch mail unit. TNT is expected to post third-quarter earnings before interest and taxes (EBIT) of 159 million euros ($235.7 million), down 23.9 percent year-on-year, according to a Reuters poll of analysts. "Although we believe in a V-shaped recovery for Express, with clear upside margin potential, we believe investors will remain sceptical on mail as long as there is no clear view on the impact of the Dutch Mail restructuring," KBC analyst Dieter Furniere said in a note. Earlier this week TNT dismissed some of the proposals of postal unions on achieving savings, but left the door open for more negotiations.. It is braced for a tough battle as it strives to cut overheads. In July it increased its annual cost savings target for 2009 to between 550 million and 600 million euros, up from 400 million. STRIKE, RECESSION FEARS TNT's main objective will be to keep unions at bay to avoid painful strikes of the kind that have paralysed British peer Royal Mail while hoping that it has left the recession behind and that the economic recovery is sustainable. Like many competitors, including its larger European rival Deutsche Post, it has been struggling to cope with falling consumer demand while coming to terms with the liberalisation of the mail market. "The Dutch mail market below 50 grams now is open, representing 50 percent of total market, which might lead to a rise in the loss of contracts to competition," Petercam analyst Thijs Berkelder wrote in a note this week. Some companies such as FedEx have suggested that shipping volumes may now be turning the corner and TNT itself said last month that the air freight market is improving. TNT also stands to benefit from a possible end to Deutsche Post's tax exemption and a minimum wage regime in Germany, where it has said it is targeting a ten percent market share. ($1 = 0.6746 euro) Keywords: TNT/ ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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