XPO Logistics doubles Q2 revenue but profitability remains low

XPO Logistics has announced its financial results for the second quarter of 2015, including 22 days of financial performance from the operations of Norbert Dentressangle. It reported revenue of $1.23bn, an increase of 109.3% year-over-year. The company also recorded an operating loss of $30.1m, a further decline from an operating loss of $11.9m in Q2 2014. Accordingly the company’s margin stood at -2.48%.

Bradley Jacobs, Chairman and Chief Executive Officer of XPO Logistics said, “We’re continuing to grow the company at a rapid pace, well ahead of plan. In the second quarter, we more than doubled our gross revenue year-over-year, grew our net revenue four-fold, and increased adjusted EBITDA more than five-fold. These results included just 22 days of the Norbert Dentressangle acquisition and one month of Bridge Terminal Transport. The most notable organic contributions to EBITDA came from our businesses in truck brokerage, expedite and last mile.”

Jacobs continued, “We’re in a strong position to act on acquisition opportunities on both sides of the Atlantic, with more than $1.2bn in cash, an untapped asset based lending facility, and a highly integrated global platform. Our new trajectory puts us on track to nearly triple the size of our company in four years. We’re now targeting approximately $23bn of revenue and $1.5bn of EBITDA in 2019.”

XPO Logistics’ transportation segment, which includes truck brokerage and intermodal, last mile, expedite, less than truckload, truckload, and global forwarding, generated total revenue of $861.2m for the quarter, a 48.2% increase from the same period in 2014. The year-over-year increase in segment revenue was primarily due to the acquisition of Norbert Dentressangle, and to 4% organic growth, or an estimated 10% organic growth excluding the impact of lower fuel prices.

Second quarter EBITDA for the segment improved by 89.61% year-on-year, to $52.1m. The increase in EBITDA was largely due to improved performance by the company’s truck brokerage, last mile and expedite businesses, and to the acquisition of Norbert Dentressangle. The company’s European business contributed transportation gross revenue of $171.6m, EBITDA of $8.4m, and operating income of $1.9m.

The company’s new Logistics segment, which provides contract logistics and related supply chain services, generated gross revenue of $359.6m and EBITDA of $30.9m. The company’s European business contributed logistics gross revenue of $177.4m and EBITDA of $6.2m.