Panalpina profits soar on record airfreight volumes

The Swiss-based freight forwarder reported net earnings of 57.5 million Swiss francs (U.S. $60.6 million) on CHF 5.53 billion in net forwarding revenues during 2017, year-over-year increases of 9.9 percent and 6.5 percent, respectively.    Panalpina saw its consolidated profits jump 9.9 percent to 57.5 million Swiss francs (U.S. $60.6 million) during the 2017 calendar year thanks in large part to record volumes and profitability in its airfreight division, according to the company’s most recent financial statements.
   The Swiss-based international freight forwarder and third-party logistics provider reported earnings per share of CHF 2.48 last year compared with CHF 2.29 per share in 2016, as net forwarding revenues climbed 6.5 percent to CHF 5.53 billion.
  Volumes in Panalpina’s air cargo division increased 8 percent year-over-year to 995,900 tons for the full year in 2017, the most in the company’s history. Reported earnings before interest and tax (EBIT) in the unit skyrocketed 36.5 percent to CHF 110.3 million compared with the previous year despite gross profit per ton slipping 1 percent to CHF 642.
   Results in the company’s ocean freight unit, on the other hand, continued their negative trend. The division reported an EBIT loss of CHF 15.1 million compared to a CHF 0.6 million loss in 2016, as 2 percent year-over-year increase in volumes to 1.52 million TEUs was not enough to offset a 6 percent decline in gross profit per TEU to CHF 281.
   The company attributed the widening losses in ocean freight primarily to “substantially” lower margins resulting from a “challenging carrier environment,” as well as “moderately increased costs due to the ongoing IT system implementation.”
   Panalpina’s logistics segment saw 2017 EBIT grow to CHF 8.1 million compared with just CHF 1.8 million the previous year despite a 14 percent decline in gross profit to CHF 331.1 million.
   “2017 ended with record high volumes and profitability in air freight,” Panalpina CEO Stefan Karlen said of the results. “We secured extra capacity early on in the year, well ahead of the exceptionally strong peak season when global capacity became scarce. Consequently, we were able to serve our customers in a very challenging market where others failed.
   “In ocean freight, we kept volumes stable throughout the year, but as margin pressure continued into the fourth quarter, a full-year loss resulted for that part of our business,” he added.
   Looking ahead to this year, Karlen said, “The fact that all relevant economic indices are trending upwards makes us reasonably confident for 2018.
   “We have made solid progress in air freight and reached a good cruising altitude on which we can build and that will allow us to reach the targeted conversion ratio in due course,” he said. “In ocean freight, we know what needs to be done to make it into calmer waters again and in Logistics, the focus remains on top-line growth by further expanding our offering of value-added services.”