“Panalpina has started very solidly into the year“, said CEO Monika Ribar. “We have been able to take advantage of the measures we put in place last year which have enabled us to improve our profitability. In the first quarter, gross profit grew across all segments and recorded strong increases in all regions, led by the emerging economies in Asia Pacific and Latin America”. She added: “Gross profit per ton and per TEU recorded double-digit growth despite the adverse impact from the strong Swiss franc”.
The ongoing strength of the Swiss franc again had a major effect on the financial results. Gross profit was impacted by almost 8% and amounted to CHF 373 million in the first quarter of 2011, an increase of 14% (+22% currency adjusted). However, currencies had no material impact on margins.
|(CHF millions)||Q1 2011||Q1 2010|
|Net forwarding revenue||1,651.9||1,587.8|
In Q1 2011, Panalpina recorded a gross profit increase across all segments. Gross profit per ton of Air Freight and per TEU (twenty-foot equivalent unit) of Ocean Freight experienced double-digit growth. Air Freight recorded a gross profit increase of 24% to CHF 170 million (+32% currency adjusted) which was driven by higher volumes of 6% and strong yields. Gross profit per ton grew by 17% (+24% currency adjusted). Ocean Freight volume increased by 2% and gross profit grew 12% (+20% currency adjusted) to CHF 113 million resulting mainly from higher yields. Gross profit per TEU increased by 10% (+16% currency adjusted). In the Logistics segment, gross profit grew by 1% (+8% currency adjusted) to CHF 90 million.
Operating expenses of CHF 318 million remained almost flat year-on-year, helped by the strong Swiss franc. In the first quarter of 2011, the EBITDA-to-gross profit margin increased to 14.9% from 3.1% in the same quarter of 2010. At the same time, the net working capital intensity reached a new all-time low of 1.3% at the end of March 2011 compared to 2.2% at the end of March 2010. These significant improvements in profitability and working capital management led to a boost of operating cash flow, which grew to CHF 108 million in the first quarter of 2011 compared to CHF -13 million in the first quarter of 2010.
On March 22, the Norwegian Competition Authority approved Panalpina’s acquisition of Grieg Logistics which was announced in February. The company has been officially rebranded Panalpina Grieg. Customers have clearly expressed their approval and support for the acquisition which creates an opportunity to expand Panalpina’s oil and gas presence in Norway while leveraging the two companies’ joint logistics know-how. Complete financial consolidation took effect on April 1, 2011.
Following a good start in 2011, CEO Monika Ribar commented that, “we are committed to further growing our business and strengthening our market position in all our core activities and especially in the emerging markets. We are focussing on increasing our volumes by continuing to meet our customers’ end-to-end logistics requirements. We still anticipate single digit market growth for both air and ocean freight this year with freight rates remaining slightly under pressure.”