UTi Worldwide reports higher profits
UTi Worldwide Inc. said it had profit of $33.7 million in its fiscal second quarter ended July 31, compared to $27.7 million in the same period in 2007.
Revenue for the period were 20 percent higher than the comparable 2007 period, $1.26 billion versus $1.04 billion. Net revenue increased 14 percent to $416.0 million from $365.1 million.
“Volume growth in our freight forwarding operations weakened toward the end of the second quarter in conjunction with slowing growth in international trade,' said Roger I. MacFarlane, chief executive officer. 'This was offset by a meaningful increase in yields, excluding the impact of fuel surcharges.”
“We continued to add new logistics business, resulting in growth in this segment despite the loss of revenue from actions taken through our cost reduction plan,” he said.
MacFarlane added that operating expenses grew at a faster rate than net revenue in the second quarter compared to a year ago, but this trend reversed at the end of the quarter as the company started to see a greater impact from a cost reduction plan and profit improvement efforts.
“We were particularly pleased to see that our efforts in contract logistics led to sequential margin improvement in the quarter. All actions under our cost reduction plan have now been completed and we continue to expect to see the anticipated improvements in the second half of fiscal 2009,” he added,
The company said operating expenses in the second quarter totaled $372.4 million, a 16 percent increase compared to the same period last year. The increase primarily reflects costs to support the company’s overall growth, as well as costs attributable to acquisitions.
The company noted that operating expenses in the fiscal second quarter included legal and related costs of about $700,000 incurred by the company as a result of the U.S. Justice Department’s publicly announced investigation into the pricing practices of the air cargo transportation industry and other related investigations and lawsuits.
The company noted it had sold its art packing business in the quarter as part of its ongoing efforts to focus on its core businesses. This sale resulted in a gain of $5.3 million.