Panalpina reports stable profits in “challenging environment”

by Payload Asia

International freight forwarding and logistics company Panalpina has kept profitability stable in the first half of 2015 despite what it said was a “challenging environment”. While the group’s gross profit decreased five per cent (adjusted at constant currency rates: +2 per cent) to CHF 736.1 million (US$ 771.7 Million), EBIT and consolidated profit remained stable, reaching CHF 60.4 million (+0.4 per cent; adjusted: +7 per cent) and CHF 45.3 million (+3 per cent; adjusted: +10 per cent), respectively.

Panalpina’s Air Freight volumes decreased two per cent in the first six months of 2015, while the market grew by 1-2 per cent, the Swiss logistics company said. Lower volumes in the automotive and energy sector were at the heart of the decrease in air freight volumes.

Gross profit per tonne decreased three per cent to CHF 720, resulting in a gross profit of CHF 293.6 million. Air Freight achieved an EBIT of CHF 46.0 million (HY 2014: CHF 57.3 million) and the EBIT-to-gross-profit margin for the first half of 2015 decreased to 15.7 per cent from 18.4 per cent in HY 2014, but was up sequentially from 13.2 per cent in Q1 2015 to 18.2% (Q2 2015) due to lower costs.

panalpina plane

Logistics reported a positive EBIT of CHF 1.5 million for the half-year, after a loss of CHF 4.3 million for the same period of last year.

“We succeeded in keeping profitability stable in the first six months of the year despite a soft air and ocean freight market. We are doing an increasingly better job of getting our costs under control. Currency adjusted, profitability was higher than last year,” says Panalpina CEO Peter Ulber. “In the first six months of the year, we grew volumes in line with the market in ocean freight but fell behind market growth in air freight, where we clearly felt the headwind in the energy sector. Overall, global transport demand softened considerably in the second quarter of the year.”

Ulber continued: “Our main focus remains on cost control and improving productivity. We have come a long way in cutting losses and transforming our operations, but we still see a lot of upside potential. Despite the headwind in the energy sector, we are confident that we can recover lost ground in air freight during the second half of the year. Our pipeline looks promising.” Panalpina expects the slow growth of the air and ocean freight markets to continue throughout 2015.