Panalpina kept up overall profitability in the first nine months of 2014. Undeterred by ongoing restructuring, group gross profit and EBIT both increased 1 per cent (currency adjusted +6 per cent and +4 per cent), reaching CHF 1,178.7 million and CHF 94.4 million respectively. EBIT loss in Logistics was reduced drastically to CHF 6.9 million for the period of January to September (down from CHF 26.8 million in the same period of 2013). Air freight and ocean freight volumes grew 4 per cent and 8 per cent year-to-date, but unit profitability decreased due to margin pressure and currency effects.
We have managed to keep up profitability in the first nine months of the year,” says Panalpina CEO Peter Ulber. “I am particularly pleased with our progress in logistics, where we have significantly reduced losses and are close to reaching break-even. We also showed continued good volume growth in air freight and very strong volume growth in ocean freight.”
Air freight
Panalpina’s Air Freight volumes grew 4 per cent in the first nine months of 2014, slightly ahead of the market. Gross profit per ton decreased 5 per cent to CHF 745 (YTD 2013: CHF 781). As a result, gross profit remained practically unchanged at CHF 469.0 million (YTD 2013: CHF 473.0 million). Air Freight achieved an EBIT of CHF 85.3 million, 8 per cent less than in the same period of last year (YTD 2013: CHF 93.0 million). The EBIT-to-gross-profit margin for the first nine months of 2014 decreased to 18.2 per cent (YTD 2013: 19.7 per cent).
Ocean freight
Panalpina’s ocean freight volumes grew a strong 8 per cent in the first nine months of 2014. This was in part the result of some important new business wins in the area of managed solutions. The ocean freight market grew approximately 4 per cent. High rate volatility remains an issue. Gross profit per TEU decreased 8 per cent to CHF 309 (YTD 2013: CHF 335), which resulted in a stable gross profit of CHF 370.4 million (YTD 2013: CHF 371.4 million). Ocean Freight posted an EBIT of CHF 16.0 million (YTD 2013: CHF 26.9 million). The EBIT-to-gross profit margin decreased to 4.3 per cent in the first nine months of 2014 (YTD 2013: 7.2 per cent) but was up quarter-on-quarter.
Logistics
Logistics increased gross profit 5 per cent to CHF 339.3 million (YTD 2013: CHF 323.6 million) and cut its EBIT loss of CHF 26.8 million in the first nine months of 2013 to a loss of CHF 6.9 million in the same period this year.
Outlook
“With our logistics business likely to reach break-even far earlier than anticipated, our main focus has now clearly shifted to improving our performance in ocean freight,“ says Ulber. “We already produce high volumes, but we have to reengineer processes and roll out the next generation IT platform.” Panalpina expects the air and ocean freight markets to grow by 3 per cent and 4 per cent respectively in 2014.
