Uti Worldwide’s quarterly earnings for the period ending January 31, 2015, were hardly surprising. Overall Q4 revenue declined 10% year-on-year to $965.6m and net revenue was down 14.5% to $312.2m. According to the company’s press release the culprits for the decline were lower air and ocean yields; a strengthening US dollar against the Euro and the South African Rand; and freight forwarding.
In fact, freight forwarding has not been kind to many providers and Uti would probably top this list judging by their financial ledger. Net revenues declined 29.7% for the quarter with a 4.9% decline in ocean freight volume and a 6.6% decline in air freight volume. This leads one to suspect that the weekly chartered air freight flights during peak season to help ease US west coast port congestion were not as profitable as hoped. Meanwhile, contract logistics and distribution also noted a decline in net revenues of 1.6% to $193.8m.
For the full fiscal year, Uti Worldwide reported revenue down 3.62% to $4.44bn and net revenue down 3.88% to $1.52bn. As the recently appointed CEO, Ed Feitzinger, noted in the earnings press release, “The fourth quarter represents the final chapter under the prior playbook”.
Indeed, more cost cutting is in store for this company that has been plagued with such problems for the past few years. Will this current plan work? According to Feitzinger, this latest plan will begin to show results in the current quarter. Let’s hope so. The company has lost some ground and needs to restore more confidence in its operations in order to effect growth in the future.
The implementation of the new “playbook” is well underway. So far the company has streamlined the freight forwarding segment’s geographic and leadership structure and has peeled away the layers of decision making for faster response time. In addition, the company is looking towards a return to its entrepreneurial roots. The return to basics should help to retain and win business more easily but it’s difficult to say if this move will constitute an antidote for Uti, particularly after the several years of upheavals this company and its customers have endured.