Panalpina’s net forwarding revenues grew 5.2% in the first nine months of 2017. Its profits were up 4.2%. In Q3, revenues were up 13.2%, whilst profits slipped by 25.0%. EBITDA was down 10.6% in Q3 year-over-year comparisons and down 0.7% for the first nine months of 2017.
Costs associated with the implementation of its SAP Transportation Management System (TMS), as well as low margins and weak profitability in its Ocean Freight segment were attributed to the overall fall in profits in the quarter.
Panalpina’s Air Freight segment had the strongest quarter of its operating units, with net forwarding revenues up 16.5% and EBITDA up 7.8%. However, its volume growth of 8% didn’t match its estimates for the market of 10%.
Further problems were seen in its Ocean Freight segment, where it made an operating loss overall. Panalpina blamed this on margin stagnation. Its volumes are continuing to grow modestly though and revenues were up 12.0% in the quarter.
In the Logistics division, net forwarding revenues were up 1.5% and EBITDA was up 25.4%. Its gross profit has fallen each quarter since Q3 of 2016 but it stabilised in this period.
Panalpina CEO, Stefan Karlen, said, “We are well-prepared for another strong peak season in Air Freight, however it remains to be seen how dynamic the carrier market will be this year. Low gross profit margins and low productivity resulting from the inefficiency of our legacy system will continue to hamper us in Ocean Freight, where for the time being we can only grow moderately to avoid incremental costs. It is therefore encouraging that our new operating system SAP TM was successfully implemented in Germany and that the roll-out in the U.S. will commence this year. In Logistics, the focus clearly lies on top-line growth and we will achieve this in the mid to long term by expanding our offering of value-added services.”
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