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By Bryan Lee, Economics Correspondent
DUTCH express freight giant TNT will spend $15 million over the next three years on a new warehouse and customer contact centre in Singapore.
It will lease three floors of the Changi South Lane building and buy additional handling equipment.
The new facility will more than quadruple the floor space for its operations to 49,000 sq ft and create an new jobs.
TNT, Europe's No.2 express-delivery company based in Hoofddorp, Netherlands, on Monday reported a 16 per cent drop in its second-quarter earnings from the same period a year ago, as fuel, labour and financing costs increased.
Net profit was euro205 million (S$440 million), down from euro244 million, while sales rose 4.5 per cent to euro2.81 billion.
The company's chief executive warned of a slowdown in European express mail volumes in June, as customers shifted from sending packages by air mail to slightly cheaper but slower road traffic.
'The sharp rise in fuel prices during the quarter and the general economic outlook have impacted both our customers and us,' Mr Peter Bakker said in a statement issued in Amsterdam.
Express mail operating profit still grew 5.1 per cent to euro153 million due to strength in emerging markets.
The company's regular mail operations continued a long-term sales decline in the Netherlands, balanced by growth in other markets.
Operating profits slid 3.8 per cent to euro173 million.
Shares fell 9.3 per cent to euro21.75 in Amsterdam on Monday, following a 10 per cent rise on Friday.
The company did not address reports in the Wall Street Journal that TNT had entered and then ended merger talks with Federal Express, which caused its stock price to gyrate wildly this month.
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