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TNT Operating Profit Climbs 7% in First-Quarter

Dutch mail company TNT said on Thursday its first-quarter operating profit rose 7%, helped by a one-off gain on the sale of real estate, and reiterated its full-year outlook.

Earnings before interest and tax (EBIT) rose to 351 million euros ($479 million) from 327 million euros in the previous year and compared with the average forecast of 340 million euros in a Reuters survey of nine analysts.

Results of TNT's Dutch mail business benefited from a 14 million euro real-estate gain as well as close cost controls while mail volume remained under pressure due to competition and the popularity of email and online services such as banking.

TNT reiterated its full-year revenue and operating margin forecasts for its mail and express divisions.

Mail volumes in the Netherlands declined by 4.3%, while TNT's non-Dutch mail operations posted revenue growth, excluding acquisitions, of 25.2%. The company is seeking to compensate for falling mail volumes at home by growth abroad.

TNT still has a monopoly on letters of up to 50 grams, about half the 2 billion-euro Dutch mail market, which the government plans to scrap from January 2008.

Parliament again delayed a vote on the new postal law last month, with uncertainty over the timing and conditions for liberalization weighing on TNT shares.

TNT's express delivery business -- which competes with UPS, FedEx and Deutsche Post's DHL -- saw its EBIT margin slip to 8.0% from 8.3% due to lower-margin acquisitions, but average revenues per kilo and per consignment rose for the 13th consecutive quarter.