Panalpina suspends some Nigeria services
Swiss forwarding and logistics firm Panalpina said today it has suspended part of its service offering in Nigeria, including its temporary importation services for oil and gas customers, while U.S. authorities conduct a bribery probe.
The Basel-based company said the suspension of services to the West African country will reduce its annual earnings before interest, taxation and amortization (EBITDA) by CHF20 ($17.1 million) to CHF30 million ($25.6 million).
Despite this impact, Panalpina confirmed its positive 2007 outlook and forecast growth of 9 percent or more in gross profit and an EBITDA/gross profit margin of 20 percent to 22 percent.
Panalpina said in July that it's assisting the U.S. Justice Department by providing documents and other information related to customers suspected of improper payments to Nigerian officials to secure preferential customs treatment.
The scope of the investigation has since been extended to review Panalpina's services into Kazakhstan and Saudi Arabia for a limited number of customers.
'In view of the unclear and uncertain regulatory framework in Nigeria, the services under review will remain suspended at least until the ongoing investigations are completed in order to protect the interests of the company and its oil and gas customers,' Panalpina said in a statement.
Panalpina said it has acted quickly to strengthen its compliance programs and training as well as seek counsel from the Basel Institute on Governance chaired by Prof. Mark Pieth, who is also chairman of the OECD Working Group on Bribery.
'The group is determined to do business in compliance with the U.S. Foreign Corrupt Practices Act and applicable laws under all circumstances. Strict compliance with the highest ethical standards as mandated by our group-wide Code of Business Conduct is an important element of our corporate behavior and culture,' said Monika Ribar, Panalpina's chief executive officer.