The freight forwarder and logistics provider saw increased net profits in the first quarter despite slightly lower revenues, compared to the first quarter of 2014.
International freight forwarder and third party logistics provider Panalpina increased consolidated net profits 10 percent to 19.6 million Swiss francs (U.S. $21 million) year-over-year in the first quarter of 2015. Net forwarding revenues for the company were 1.5 billion Swiss francs for the quarter, down 4 percent from 1.6 billion Swiss francs in the first quarter of 2014.
The company attributed the results primarily to better performance from its ocean freight and logistics units, which were offset by lower airfreight volume growth and negative effects from a strong Swiss franc.
Ocean freight volumes were up 5 percent year-over-year in the first quarter for Panalpina, and beat the estimated overall market growth of 3 percent. Gross profits for the unit fell slightly, from 122.7 million Swiss francs in Q1 2014 to 119.1 million Siwss francs in Q1 2015, on an 8 percent decrease in gross profit per TEU to 308 Swiss francs.
Panalpina’s logistics division saw gross profits fall 3 percent to 104.7 million Swiss francs. The company said in a statement the decline was due to its “exit from underperforming sites,” noting that earnings before interest and tax (EBIT) “turned positive” with a profit of 1.2 million Swiss francs for the first quarter, compared to a Q1 2014 EBIT loss of 5.5 million Swiss francs.
Airfrieght volumes rose 1 percent in the first quarter, falling short of the estimated 3-4 percent overall growth in the market, due to lower volumes in the automotive sector. Gross profit for the division fell 3.7 percent to 148 million Swiss francs on a 4 percent decrease in gross profit per ton to CHF 722 Swiss francs.
Panalpina CEO Peter Ulber said of the results, “In the first three months of the year, earnings were up, despite headwinds from a strong Swiss franc and a slowdown in volume growth in Air Freight. Group EBIT and EBIT-to-gross-profit margin increased both year-on-year and quarter-on-quarter. Slightly better results in Ocean Freight and profitability in Logistics contributed to a decent first quarter.
“With the economic environment weaker than expected and uncertainties around the development of the oil price, the market is difficult to read,” Ulber added. “All the more, we will focus on strategy execution as we transform our business. Overall, we remain cautiously optimistic and expect to grow in line with the market in air freight and outperform the market in ocean freight.”
Profits up 10% at Panalpina
