Panalpina improves EBIT in 2014 results

Panalpina has announced its financial results for 2014, reporting that it has finished the year 2014 in line with its expectations. The company recorded net forwarding revenue of CHF6.71bn, a slight decline of 0.75% year-on-year. However EBIT saw a sharp rise of 143.28% over 2014, to CHF174.0m. Accordingly Panalpina’s EBIT margin stood at 1.74%.

“In 2014, we executed on our clearly laid out strategy. This shows in the results we achieved,” said Panalpina’s Chief Executive Officer Peter Ulber. “Streamlining in Ocean Freight continues, which is a crucial prerequisite for the large-scale and complex transition to our new business platform SAP TM in 2015. We are satisfied with the achieved growth in Air Freight and particularly pleased with the turnaround in Logistics.”

Panalpina’s marginal decline in revenue for 2014 was a consequence of its efforts shed unprofitable business in the Logistics segment. This strategy contributed to the improvement in the overall EBIT result, alongside EBIT growth from the Air Freight segment. This growth was partially offset by an EBIT decline in the ocean freight segment.

Panalpina’s Air Freight net forwarding revenue grew by 2.82% year-on-year to CHF3.14bn and was driven by volumes, which grew by 4% to 857,800 tons in 2014. However gross profit per ton decreased by 3% to CHF742.00 and therefore overall gross profit stayed basically stable at CHF636.3m. On an operating profit level, Air Freight achieved an EBIT of CHF112.0m, representing year-on-year growth of 53.75%. However adjusted EBIT actually fell by 6.09% from 2013’s result.

The company’s Ocean Freight revenue grew by 1.92% year-on-year to CHF2.83bn. Like the growth in the Air Freight segment this result was driven by rising volumes, which grew by 7% year-on-year to 1,606,500 TEUs. Due to continued business wins in high-volume but lower-margin business, gross profit per TEU decreased by 7% to CHF306. Together these two factors resulted in a stable gross profit of CHF491.5m. Ocean Freight posted an EBIT of CHF12.9m in 2014, down by 48.4% year-on-year. The decrease in EBIT was mostly attributable to the costs of streamlining operations and continuous investments in IT.

Panalpina’s Logistics segment saw its revenue decline by 20.66% from 2013, to CHF730m. This decline resulted from the company parting with a number of loss-making facilities and unprofitable road activities. The positive effect of these actions was that the Logistics segment reduced its EBIT loss to CHF8.2m in 2014, down from a loss of CHF49.9m in 2013. Further positive signs can be seen in the segments gross profit, which grew by 5% to CHF458.2m in 2014. This growth resulted from further expansion to Panalpina’s logistics manufacturing services and other value-added services, particularly for the technology and fashion industries.


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