Panalpinas problems hit Q1 profits
01 / 05 / 2008
COMPARED to the 1st quarter of 2007, the global transport and logistics group Panalpina, has increased its net forwarding revenue in the first three months of 2008, but has reported significantly lower profits.
Gross profit dropped 2.2 per cent, however, overall net earnings fell by almost 40 per cent.
Much of these losses can be attributed to legal fees and financial ramifications of the illegal payment scandal in Nigeria.
Panalpina suspended operations in Nigeria last September after an investigation began into alleged improper payments to officials of the Nigeria Customs Service.
Panalpina had stated in July that it had started an examination of potentially “improper payments” in Nigeria, Kazakhstan and Saudi Arabia, after US authorities asked it to provide documents about shipping services for clients in these countries.
But the situation in Nigeria cannot be held solely responsible for the lacklustre results. Airfreight tonnage grew at only 4.4 per cent, close to the industry growth as a whole.
Panalpina has been used to and expects to outperform the general market and these figures will be a concern. Panalpina put the sluggish volume growth down to a shift to ocean freight, but it will be interesting to compare the results with its major competitors.
The company has already reacted to the disappointing results by radically overhauling its management structure, firstly by allocating a place on the board of directors to Guenter Rohrmann, in a non-executive role.
Having made a huge impact at AEI and DHL, Rohrmann said that he would “share his 40 plus years
experience in air cargo with Panalpina”.
In addition, the board has approved the decision to increase the member on the company’s executive board from five to seven.
Former head of ocean freight, Dominik Tichelkamp, has now assumed the responsibility of chief product officer. He will presumably now oversee the airfreight side of the business.
Karl Weyeneth has been appointed chief operating officer, and will assume operational responsibility for all regions. He replaces Jörg Eggenburger who is leaving the company by “mutual agreement”.
Finally, Sandro Knecht has been appointed chief sales officer.
Chief executive officer, Monica Ribar, explained the reasons behind the changes: “In a changing global market with increasingly complex customer requirements, short reaction times and structures enabling flexible decisions, are core elements for success. With a new management structure, to be implemented with immediate effect, we consequently continue on our path to be customer-focused and very close to the