Panalpina Q1 profits rise, despite 'M&A distractions'
Improved efficiencies helped Panalpina to a first-quarter ebit up 15% to Sfr28.1m ($27.8m), while consolidated profit also ...
Panalpina enjoyed a 30% rise in ebit in the first half of 2018, leading to a near-21% rise in consolidated profit, to Sfr36.1m ($36.2m).
It also announced it had acquired a major stake in yet another perishables business, Skyservices in South Africa, its fifth such investment since September.
Based in Johannesburg and Cape Town airports, the majority of Skyservices exports go to London, Amsterdam and Frankfurt, “strengthening the Panalpina Perishables Network,” said the company, which also noted the strong perishables export market from South Africa to the UAE and US.
In its first-half results, ocean freight broke even, although volumes fell 3% after the loss of a big contract, but gross profit per teu rose 6% to Sfr299, and overall gross profit rose nearly 3% to Sfr220.9m. However, Panalpina recorded an ebit loss for ocean of Sfr5.5m, nearly double last year’s loss.
However, CEO Stefan Karlen put a positive spin on the numbers.
“Ocean freight broke even again in the second quarter, as a result of strict cost control and recovering volumes from April to June.”
In air freight, Panalpina’s strongest division, volumes grew at less than the market rate, up 3%. However, gross profit per tonne increased 16%, and gross profit overall rose 20% to Sfr354.7m, with ebit up 36% to Sfr53.4m. Ebit-to-gross-profit margin came in at 15.1% compared with 13.3% a year earlier.
The logistics division saw gross profits up 3% to Sfr168.8m, with ebit up 26% to Sfr6.8m.
Mr Karlen said: “Halfway through 2018 we can say that Panalpina is on track. Sustained margins in both air and ocean freight and the reliable performance in logistics led to sound half-year results.
“We are pleased with the progress, especially when considering that we are working diligently on major transformation projects while focusing on accelerated growth at the same time.”
Panalpina’s gross profit increased 11% to Sfr744.4m, while total operating expenses declined slightly to Sfr607.1m.
Mr Karlen was confident about the second half, despite noting political concerns.
“We expect accelerated volume growth for our air and ocean freight activities. 2017 was a record air freight year though, so the comparison will be tough, and uncertainties in international relationships will increase volatility in the air and ocean freight markets and possibly change trade patterns.
“Regardless of the market environment, we are determined to stay focused on executing our strategy as we continue to build a robust and efficient organisation that can deliver sustainable, profitable growth.”