UTi operating income down 42 per cent

UTI Worldwide reported a 42 per cent decrease in operating income for the third quarter, down to US$31.4 million, from $53.8 million. There was a 20 per cent drop in revenues down from $1,210.1 million to $967.2 million. Net revenues were $361.5 million, a decrease of 11 per cent from $408.2 million.Eric Kirchner (right), chief executive officer, said: “Declines in revenue moderated considerably on a year-over-year basis in the third quarter. Volumes improved throughout the third quarter, particularly in airfreight, which experienced an increase in the month of October, the first increase since early 2008. Our sales focus has helped us outpace the market, which we have not accomplished in more than a year.“But this improvement was largely offset by industry-wide yield pressure as carriers raised rates substantially, particularly out of Asia. These higher rates could not always be recovered in the near term. While yield contraction was widely expected in the second half of the year, the squeeze was greater than anticipated in the third quarter because of aggressive carrier actions. We are planning for yields to trend towards historic levels as carrier rates adjust to better reflect supply and demand.”