Panalpina maintains flat earnings in ‘soft’ market

Swiss-based global freight forwarder Panalpina was able to hold the line on profits in 2015 despite a decline in both airfreight and ocean volumes, according to the company’s most recent financial statements.    Panalpina, a top five global ocean and air freight forwarder in terms of volume, reported that operating income last year ticked up to 117.2 million Swiss francs ($117.5 million) from 116.7 million Swiss francs in 2014, with an operating margin of 8 percent (up 0.6 percent) despite a challenging freight environment.
   The company’s airfreight volume decreased 2.5 percent to 836,200 tons, primarily due to lower shipment orders from customers in the energy and automotive sectors. Gross profit per ton decreased 5.8 percent to 699 Swiss francs and air freight gross profit decreased to 584 million Swiss francs from 636 million Swiss francs the year before. Overall operating profit for air freight fell to 88.5 million Swiss francs from 112 million francs in 2014.
   On the ocean side, volumes decreased 0.8 percent in a flat market. The company said it transported almost 1.6 million TEUs. Gross profit per TEU decreased 1.5 percent to 301 Swiss francs, resulting in a gross profit of 480.4 million francs compared to 491.5 million francs the prior year. Ocean freight’s earnings before interest and taxes (EBIT) was 26.6 million francs, up from 12.9 million francs in 2014 and the gross profit margin doubled to 5.5 percent.
   On a positive note, Panalpina said its contract logistics division achieved a positive operating income for the first time, despite a 10.7 percent decrease in gross profit. The profit was achieved by exiting leases for warehouse facilities that were losing money. Panalpina’s logistics EBIT stood at 2.1 million Swiss francs compared to an EBIT loss of 8.2 million francs in 2014.
   “We have maintained profitability in a year that was characterized by a soft market, the low oil price, negative currency impacts and high IT investments on our end,” Panalpina CEO Peter Ulber said in a statement. “The results prove our resilience in more difficult times. Excluding currency effects, EBIT even increased by 15 percent.”