News / Panalpina's half-year results: 'a respectable achievement' or 'shockingly bad'?

Panalpina has claimed it spent the second quarter defending itself against “aggressive” competition to cover an undeniable dip in profits over the six months as the acquisition by DSV loomed.

Speculation is mounting that the Danish forwarder may wrap up its acquisition of Panalpina next month, despite initial predictions of an October completion.

Panalpina chief executive Stefan Karlen today suggested the deal had led the competition to act.

“After it was announced that Panalpina and DSV would join forces, our competitors went more aggressively after our business in the second quarter, but we stood our ground,” he said.

“Nonetheless, group ebit and profit almost reached last year’s levels. Given these circumstances, our stable half-year results are a respectable achievement.”

The first-half results were 5% short of 2018’s performance, with ebit down from Sfr54.7m ($55.4m) to Sfr52.1m, despite a marginal 1.6% upswing in revenues to Sfr2.9bn.

Air freight was largely to blame for dwindling profits, with its ebit plummeting almost 40%, from Sfr53.4m to Sfr38.4m, said Mr Karlen.

“The decrease in gross profit was chiefly the result of lower margins in air freight and lower volumes from the automotive sector, which shifted into reverse gear.”

Conversely both logistics and ocean freight reported increased profits, despite the latter noting a 3% dip in volumes for the six-month period. Last year, ocean freight reported a Sfr5.5m ebit loss and in contrast, this year it reported a profit of Sfr5.5m.

For logistics, the expansion of its manufacturing services helped Panalpina hit Sfr8.1m in ebit, up from 2018’s Sfr6.8m.

“During the coming months, our focus will remain firmly on living up to our reputation in the market and delivering outstanding service quality,” said Mr Karlen.

“In a highly uncertain macroenomic and political environment, against the backdrop of contracting air and ocean freight markets, we will continue to provide our sought-after expertise.”

Loadstar Premium head Alessandro Pasetti, however, today described the results as “mostly unequivocally, shockingly bad”, and suggested Panalpina’s Sfr5.5bn price tag “is too damn expensive”.