Soft airfreight pulls down Panalpina profits

Panalpina’s air freight volumes decreased 2% from January to September in what it described as a “very soft” market that grew less than 1% during that period. The Swiss-based forwarder says it moved less oil and gas and automotive cargo, but more perishables.
Gross profit per ton decreased 4% to CHF 715 compared with CHF 745 in the same period of 2014, resulting in a total gross profit of CHF 439.7 million as against CHF 469.0 million in 2014. Air freight achieved earnings before interest and tax (EBIT) of CHF 67.6 million against CHF 85.3 million in 2014, while the EBIT-to-gross-profit margin for the first nine months of 2015 decreased to 15.4% compared with 18.2% in 2014.
Panalpina said that its overall profits remained stable at CHF 69.3 million (or CHF 75.8 million or +9.5% on a currency adjusted basis) in the first nine months of 2015.
Group gross profit decreased 6% to CHF 1,107.3 million (currency adjusted: CHF 1,177.0 million or 0%), while EBIT decreased 2% to CHF 92.4 million (currency adjusted: CHF 102.7 million or +9%), gains in ocean freight and logistics being offset by the losses in airfreight.
Panalpina chief executive Peter Ulber predicted: “The air and ocean freight markets will continue to be soft at best and a rebound of the oil price in the near future seems unlikely. It is all the more important that we continue to control cost with great discipline and implement new IT systems and processes in order to improve our productivity.” Panalpina would also accelerate investments in less cyclical business “to further reduce our exposure to certain industries.”