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Panalpina reports a first quarter profit

May 7, 2013

The Panalpina Group returned to profit in the first quarter of 2013 after a loss in the last year. The provider of supply chain solutions reported a consolidated profit of CHF 14 million for the first three months of the year. Net forwarding revenue increased by 4% to CHF 1,602 million and gross profit by 0.5% to CHF 366 million compared to the previous year. While the Air Freight division continued to struggle in a shrinking market, the Ocean Freight division grew comfortably above market. The Logistics division also pursued its growth path.

“Our results for the first quarter of 2013 are in line with what we could expect in a continuously difficult market,” said CEO Monika Ribar. “Ocean freight and logistics continued to grow strongly while air freight volumes were still soft.”

 

Consolidated profit of CHF 14 million

Panalpina reported a consolidated profit of CHF 14 million for the first quarter of 2013. Last year, one-off costs in the first quarter had led to a group loss of CHF 41 million.* Net forwarding revenue in the first quarter of 2013 was up by 4% to CHF 1,602 million. Gross profit amounted to CHF 366 million, an increase of 0.5%.

 

Panalpina Group: Results for the first quarter of 2013

(CHF million)Q1 2013Q1 2012*
   
Net forwarding revenue1,601.61,539.8
Gross profit365.8364.1
EBITDA30.1(25.5)
EBIT18.5(35.6)
Consolidated profit / (loss)14.3(40.9)
Non-recurring items:-(59.2)
underlying EBITDA30.133.7
underlying EBIT18.523.6

* Personnel expenses and income tax expenses in 2012 have been restated due to the application of IAS 19 revised.

Americas ahead of EMEA and Asia Pacific

Strong trade across the Pacific positively impacted gross profit in the Americas. It reached CHF 113 million in the first quarter of 2013 (+5%). However, weak European imports affected gross profit in EMEA and Asia Pacific. Gross profit in Asia Pacific fell by 8% to CHF 72 million. The EMEA region saw a slight increase of gross profit by 2% to CHF 181 million. Europe recorded strong exports in Ocean Freight but weak overall imports, particularly from Asia.


Further market share gains in Ocean Freight

In Ocean Freight, volumes reached a new first quarter record level. Panalpina shipped 7% more TEUs (twenty-foot equivalent units) than the year before, expanding well ahead of the market which grew by approximately 2%. Gross profit per TEU of Ocean Freight was below prior year (-4%) but up 3% quarter-on-quarter. The lower unit profitability was more than offset by the higher volumes, leading to an increase of gross profit of 2% to CHF 117 million.

 

In Air Freight, the environment remained difficult. While the volumes of Panalpina’s customers in the high-tech, telecommunication and chemicals industries stayed weak, the volumes of consumer and retail, healthcare and oil and gas customers showed double-digit growth. Overall, volumes were down by 3% in the first quarter (market: -2%). Gross profit per ton of air freight decreased by 5% year-on-year but increased by 6% quarter-on-quarter. The lower volumes and unit profitability led to a contraction in gross profit compared to the previous year of 8% to CHF 147 million.

 

Panalpina’s Logistics division, which is increasingly offering Value-Added Services (VAS) to its customers, grew by a solid 13% and reached a gross profit of CHF 102 million.

 

EBITDA of CHF 30 million

EBITDA came in at CHF 30 million in the first quarter of 2013, a decrease of 11% compared to the underlying prior year figure. The EBITDA-to-gross profit margin decreased to 8.2% from underlying 9.3% in the previous year.

 

Outlook

“Looking forward we are optimistic in regards to our activities in ocean freight and logistics. In air freight, however, the outlook remains weak,” said Ribar. “We will continue to work towards a more balanced mix between our core products air freight, ocean freight and logistics and also towards a better mix of industries that we serve. At the same time we are keeping a very close eye on costs.”

 

About Panalpina

The Panalpina Group is one of the world's leading providers of supply chain solutions. The company combines its core products of Air Freight, Ocean Freight, and Logistics to deliver globally integrated, tailor-made end-to-end solutions. Drawing on in-depth industry know-how and customized IT systems, Panalpina manages the needs of its customers' supply chains, no matter how demanding they might be. Energy Solutions is a specialized service for the energy and capital projects sector. The Panalpina Group operates a global network with some 500 offices in more than 75 countries, and it works with partner companies in a further 90 countries. Panalpina employs 15,000 people worldwide who deliver a comprehensive service to the highest quality standards – wherever and whenever.