“We are glad to see the gradual recovery of the global markets continuing and our freight volumes picking up”, says CEO Monika Ribar. “We are well on track with the implementation of our procurement and sales initiatives, managed to keep our costs at low levels and significantly increased productivity. Our volumes have been starting to outpace the market again and I am confident that we will also see our profitability improving further in the coming months”, she adds.
In the first quarter of 2010, air freight volumes grew in line with market levels (23-25%) by 24% on a year-on-year basis. Ocean freight volumes grew by 22% on a year-on-year basis outpacing the market (15-20%). Despite these very encouraging growth rates, volumes remained below pre-crisis levels. Gross profit declined by 13% year-on-year, but increased by 5% quarter-on-quarter. While profitability per ton of air freight is showing clear signs of improvement, profitability per TEU of ocean freight is still under pressure. In terms of tradelanes, Intra-Asian and Latin American related traffic recorded exceptionally strong growth in both air and ocean freight.
Personnel and other operating expenses were well under control and tracking significantly below the first quarter of 2009. Productivity measured in shipments handled per FTE was kept at very high levels. EBITDA decreased to CHF 10 million which includes legal fees of CHF 8 million related to ongoing investigations. Net working capital intensity remained low at 2,2%. Net cash and cash equivalents as per March 31, 2010 amounted to CHF 511 million.
In view of the advanced stage of the settlement negotiations with the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC), Panalpina has decided to reserve CHF 120 million, an amount anticipated to cover fines, other penalties and legal expenses relating to the settlement of both the U.S. Foreign Corrupt Practices Act (FCPA) and the U.S. antitrust investigations. This amount will be reflected accordingly in the company's 2010 half year financial statements. The finalization of the settlement with the U.S. authorities is expected in the near future. The above reserve does not cover other ongoing, non-U.S. antitrust investigations against the international freight forwarding industry in particular the proceeding launched by the European Commission as Panalpina is unable to predict the amount of any potential fine with certainty.
Panalpina expects only a minor impact on its business from the recent temporary closure of the European air space. On a positive note, Panalpina through its own-controlled air freight network was able to secure the very first flight of a freighter plane into Europe after the closure of air space. The company’s «Dixie Jet» took off from Huntsville, Alabama on Sunday 18 April at midnight and landed safely in Zaragoza, Spain, on Monday 19 April in the afternoon.
|(in CHF millions)||Q1 2010||Q1 2009|
|Net forwarding revenue||1,588||1,610|
“While we are glad to see volumes on the rise in the first quarter, the remainder of 2010 is hard to predict”, says CEO Monika Ribar. “We expect Asia to be the major growth driver in the coming months as consumption in Europe will most likely take more time to recover. Our focus will thus remain on gross profit generation, cost and cash control”, she adds.