Panalpina sees 15% profit rise in 2007, confident for 2008

Panalpina sees 15% profit rise in 2007, confident for 2008

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Basel, Switzerland-based Panalpina today posted a “convincing” profit rise for 2007 and predicted it would repeat its above market organic growth in a “challenging” year ahead.
   The global forwarding and logistics group reported net income of 210.6 million Swiss francs ($187 million) for 2007, up 14.8 percent from SFr 183.5 million in the previous year. Annual earnings before interest and tax (EBIT) increased 14.7 percent to SFr 299.4 million ($194 million) from SFr 168.6 million. Gross revenue improved 13.9 percent to SFr 10.59 billion ($9.4 billion) with net forwarding revenue rose 12.3 percent to SFr 8.68 billion ($7.7 billion).
   'The results demonstrate both our strong position in the market, the continued trust of our customers around the globe and the excellent performance of Panalpina's management and employees,' said Chief Executive Officer Monika Ribar.
   Panalpina's net forwarding revenue from its air freight business grew 11.2 percent to SFr 4.13 billion ($3.65 billion) on a 8.4 percent volume increase to 947,000 tons.
   Ocean freight turnover improved 16.1 percent to SFr 3.28 billion ($2.9 billion) with volumes rising 13.7 percent to 1.23 million TEUs. Supply chain management revenue was up 6.6 percent to SFr 1.28 billion ($1.1 billion).
   Panalpina’s yearly net forwarding revenue and EBIT on a regional basis was:
   ' Europe/Africa/Middle East/CIS — Revenue: SFr 5.06 billion ($4.5 billion), up 14.6 percent; EBIT: SFr 176 million ($156 million), up 8 percent.
   ' North America — Revenue: SFr 1.68 billion ($1.5 billion), down 1.1 percent; EBIT: SFr 22 million ($20 million), up 100 percent.
   ' Asia/Pacific — Revenue: SFr 1.12 billion ($991 million), up 18 percent; EBIT: SFr 83 million ($74 million), up 22.1 percent.
   ' Central and South America — Revenue: SFr 818 million ($724 billion), up 22.1 percent; EBIT: SFr 19 million ($17 million), no change.
   'These convincing figures are further proof of the attractiveness of our services and the efficiency of our asset-light business model,” Ribar said. “We have, by pure organic growth, strengthened our worldwide No. 3 and No. 4 ranking in air and ocean freight, respectively, and we were able to contract substantial new business in all our strategic customer industries, in particular in the telecommunications and automotive verticals and in project business.'
   Looking at its prospects for 2008, Panalpina is forecasting a gross profit increase of at least 4 percent and an earnings before interest, taxes, depreciation and amortization (EBITDA)/gross profit margin of 17.5 percent to 18.5 percent. For 2009, the group expects to return an EBITDA/gross profit margin of at least 21 percent.
   Panalpina’s management estimates the financial impact of an adjusted service portfolio and enhanced compliance efforts will lower the group's EBITDA by between SFr 60 million and 80 million, from the SFr 360.8 million ($320 million) in 2007. The company is being investigated by international antitrust regulators as part of an industry-wide probe, and is restructuring its organization in Nigeria, where some services were suspended last year amid an investigation into improper payments to customs officials.
   '2008 will be a challenging year for the group, impacted by intensified compliance efforts and related external fees, but also due to weakening trends in certain economies. We are however convinced that above-market organic growth and under-proportional operating cost development will be achieved,' Ribar said.