UTi Worldwide reports Q2 fiscal 2016 results

UTi Worldwide has reported fiscal 2016 Q2 results, with revenues of $913.9m, a decline of 16.5% year-on-year. The company also recorded ‘adjusted’ EBITDA of $11.2m, representing a decline of 52.9%. Accordingly, its adjusted EBITDA margin stood at 1.23%.

UTi’s net revenues (revenues minus purchased transportation costs) fell by 14.0% to $338.5m compared to the same quarter in the previous year.The company attributed the decrease to lower air and ocean volumes in the freight forwarding sector as well as the strengthening of the US dollar against the Euro and South African Rand compared with the same period last year.

On a constant currency basis, net revenues were down by 5.4%. Although the Contract Logistics and Distribution division reported net revenue growth of 1.0%, this was insufficient to offset the Freight Forwarding division’s net revenue decline of 13.1% (both figures on a constant currency basis).

Edward G. Feitzinger, Chief Executive Officer, said, “We continued to make progress against our four strategic priorities to achieve our long-term goals and improve performance, in spite of unseasonably weak demand in key air and ocean markets this quarter. I am very pleased that we were able to deliver a second consecutive quarter of solid CL&D performance, with year-to-date CL&D results slightly ahead of our internal expectations.” He added “Freight forwarding volumes have stabilized sequentially as we have demonstrated improved client retention; however, normal seasonal volume growth did not occur in the second fiscal quarter due to the global macroeconomic slowdown. We do not expect macroeconomic headwinds to abate during the second half of the year, but we do anticipate that our second half volumes and net revenues will benefit from the new client wins we recorded in the first half of the year.”