By Gavin van Marle
Swiss forwarder Panalpina reported third-quarter results, which saw revenue for the first nine months of the year down 12 per cent year-on-year and unadjusted EBITDA tumbling 20.4 per cent to SFr104.6 million (US$105.1 million). The company’s results were hit by the SFr26.1 million cost of restructuring its oil and gas division in the second quarter. Chief Executive Stefan Karlen said that after stripping out this one-off, the company had managed an improved performance. “Despite shrinking air and ocean freight markets and high margin pressure in the first nine months of the year, we delivered an improved EBIT and consolidated profit (both adjusted for one-offs). Continued high cost discipline, particularly in the third quarter, made this achievement possible.”
Panalpina reported gross profit of SFr1.09 billion, compared with SFr1.1 billion last year, down 1 per cent. Revenues totalled SFr3.86 billion this year, compared with SFr4.41 billion for the first nine months of 2015. EBIDTA for the third quarter was SFr45.4 million, a marginal improvement on last year’s SFr44.9 million.
However, its main markets were characterised by continuing pricing volatility and flat demand. Mr. Karlen said: “Our air and ocean products developed contrarily. In air freight, volumes increased 9 per cent and decreased by the same amount in ocean freight. This resulted in a practically unchanged overall gross profit when compared with last year.”
Despite what has generally been a contracting market, Panalpina is claiming a successful year so far in 2016 – volumes grew 5 per cent in the first quarter, 11 per cent in the second and 10 per cent in the third – and its nine-month gross profit for air freight grew to SFr453.4 million from SFr439.7 million last year.
However, the ocean freight market remained flat in terms of volumes. Panalpina’s first-quarter volumes were down 10 per cent year-on-year, followed by an 8 per cent decline in Q2 and another 9 per cent fall in the third. Sea freight gross profit was Sfr345 million for the nine-month period, a 5 per cent decrease on the SFr362.2 million last year.
The group also saw gross profit at its logistics division decline by 4 per cent to SFr293.3 million, mostly due to “lower overland activities in oil and gas”, although it has cut its exposure to the weaker market – it has reduced staff numbers in its energy and project solution division by 25 per cent since January 2015.
Turning around the poor performance of its logistics division – an accumulated SFr38.9 million loss from Q2 13 to Q4 14 – was a priority and, since the beginning of last year, Panalpina has closed some 70 sites globally, and transformed a further 35 to perform value-added services. Mr. Karlen added that Panalpina would “continue to seek growth opportunities” as a way of mitigating what is expected to be an unfavourable air and ocean market environment, as well as volatile freight rates. “We are absolutely committed to maintaining our cost discipline, while at the same time intensifying our focus on top-line growth. “It is our firm intention to grow organically, but also by way of bolt-on acquisitions. In this process, we don’t expect any tailwind from the markets in the foreseeable future,” he said.
Reprinted courtesy of The Loadstar (www.theloadstar.co.uk)