Dutch freight and delivery firm TNT Express, which issued a profit warning earlier this month, flagged it would cut costs further and reduce its fleet on routes between Asia and Europe because of economic uncertainty.

TNT Express, which listed in May after it split from Dutch mail group PostNL, has seen a slowdown in global trade hit its cargo flights between Europe and Asia and is struggling to fix operational issues in Brazil.

"Performance can be better and should be better," Bernard Bot, chief financial officer, told reporters as he outlined plans to reduce excess capacity on routes between Asia and Europe by cutting the fleet from a peak of four planes to either two or three.

Bot warned that with the uncertain economic environment, particularly for next year, TNT Express was preparing for various scenarios, including at worst the kind of stark drop in volumes seen during the economic downturn in 2008.

"Even if the economy stays steady, we believe we can do more to bolster the performance" in the European, Middle East, and African operations, he said.

U.S. rivals UPS and FedEx are navigating the slow-growing economy through increased pricing, technology improvements and quickly fine-tuning their capacity, adding seasonal workers when needed.

TNT, which has expanded aggressively in China and Latin America in recent years, has struggled to make its transcontinental routes profitable.

TNT Express reported a 47 percent year-on-year drop in adjusted earnings before interest and tax (EBIT) to 43 million euros on revenues of 1.777 billion euros, up 1.3 percent year-on-year.

Analysts in a Reuters poll had forecast underlying EBIT of 33.8 million euros on revenues of 1.77 billion euros.

The stock, which first traded at 8.9 euros on May 26, has fallen on concerns about the slowing economy and problems in Brazil. It traded up 5.38 percent at 6.195 euros at 0949 GMT.

Besides the unwillingness of clients to pay for pricey air transport, TNT Express has been grappling with operational issues in Brazil, where a botched integration of businesses has led to a loss of customers and a drag on earnings.

TNT Express said on Monday that performance at its Brazil operations continued to improve, and reiterated its second-half 2012 deadline for a turnaround in the business.

Bot said the turnaround was on track but that the key issue was to lift revenues to make up for the loss of customers.

"The Americas is showing no sign of improvement quarter-on-quarter, indicating that Brazil continues to suffer," said Rabobank in a research note.

"Today's result shows the turnaround for Brazil by H2 2012 is a long-term and challenging target," it added. (Reuters)