Panalpina outperforms the market in Q2

Perhaps Peter Ulber has been lucky with the timing of his appointment, but his first set of quarterly results as CEO of Panalpina has shown a continuing improvement in Panalpina’s performance.

As measured in Swiss Francs (CHF), net revenue for the second quarter 2013 was up 3.5% year-on-year to CHF1726.5m, whilst gross profit was up 9.8%. Combined with lower increases in internal cost, this resulted in a big jump in profitability. EBITDA (Earnings Before Interest, Tax, Depreciation and amortisation) was up 58.4% year-on-year at CHF53m, whilst consolidated profit rose 43.5% at CHF24m.

Panalpina appears to have been able to leverage a market with weak freight rates and deliver higher gross-profit across both air and sea forwarding business. This was combined with increases in volume in both sectors as well.

In air forwarding, the most notable figure was an increase in volumes with the second quarter seeing tonnages 3% higher than the same period last year and contrasting with the 3% fall seen in the first quarter of 2013. Panalpina stated that this is in a market that has generally seen no growth over the second quarter. Gross profit increased by 2.6% year-on-year for the quarter, however the position over the half year shows a decline.

In sea freight forwarding, Panalpina continued a notable increase in tonnage with a 5% year-on-year increase following on from a 7% increase in the first quarter of the year. Gross profit also hardened by 8%. In contrast to air freight, it was an increase in business in Europe that drove the sea freight business with a 14% increase in volume in ‘EMEA’ over the first half year 2013.

The more stable ‘logistics’ business also saw an increase in net revenue of 3.5% and a hardening gross profit margin of 9.8%.

Panalpina said that for its sea-freight forwarding business it was Latin America that proved to be the most expansionary market for the company, whilst consumer products and pharmaceuticals complimented its oil and gas business in air freight.

However, the company’s new CEO, Peter Ulber, was not overly optimistic about market conditions, not seeing “any fundamental changes in the world economy”. He expected the company’s profitability to “slowly recover”, whilst continuing to make “strict cost management a top priority.” Despite this note of caution, through 2013 Panalpina has out performed a number of its competitors which might mark a change in the prospects for the company.

Note: 1CHF = €0.811/US$1.07