Panalpina airfreight volumes improve in Q1 despite market decline

Panalpina has bucked market trends by reporting an increase in air cargo volumes in the first quarter of the year, while overall profits and revenues were also on the up.

The company, which looks likely to merge with Denmark’s DSV, saw airfreight volumes increase by 8% in the first quarter to 260,000 tons.

According to IATA, the air cargo market declined by 3.1% year on year during the first two months of 2019, the latest figures available, while Panalpina estimates the market is down 2%.

The forwarder said that the increase in airfreight was driven by acquisitions, which contributed 6% of the increase.

Last year the company purchased Newport Cargo in Argentina, while at the end of 2017 it was in the process of adding Adelantex and AD Handling.

However, the airfreight business did see its gross profit per ton decline by 10% on a year ago as its margins have come under pressure. While volumes increased by 8%, revenues for air were 0.9% up Sfr757.2m.

Overall, the company saw first-quarter revenues increase by 5% year on year to Sfr1.5bn, ebit improved by 15.2% to Sfr28.1m and profit was up 15.7% to Sfr19.2m.

Panalpina chief executive Stefan Karlen said: “In the first quarter of this year, Panalpina generated 15% more EBIT and profit than in the same period of last year.

 “We improved profitability despite a challenging market environment and during a time when considerable management resources were absorbed by the M&A topic. This demonstrates the underlying quality and strength of our organisation.

“Since the news of DSV taking over Panalpina broke, circumstances have changed. To give any sort of outlook is not only more challenging than ever before, but also constrained by legal restrictions.

“However, Panalpina continues to conduct business as usual. We have continued to win new business after the transaction was announced and we are determined to keep doing so in the weeks and months ahead.

“We are competing in the market with our strong brand, great capabilities and solid service offering, supporting our customers by providing them with tailored solutions that create value for them. This is our commitment and obligation for the rest of the year.”