One-offs help Logwin to get back on track


Logwin’s annual results released on 3 March showed revenue declining by 6.2% to about €1bn in 2015. However, its adjusted operating cash flow (AOCF) improved significantly in a very challenging market. The performance is mildly positive for the Luxemburg-based 3PL.

Firstly, currency trends provided a helping hand given that the appreciation of key foreign currencies against the euro, its reporting currency, determined a “tangible contribution to the rise in revenues” in its core air and ocean business.

Secondly, “other operating income” included €6.7m of foreign exchange gains and €3.9m of gains from divestment and amounted to 40% of total operating income before goodwill impairment.

A stronger performance at operating level brought relief to its shareholders, although 2016 will remain a year of transition. Logwin boasts a market cap of less than €300m and a relatively low enterprise value of about five times its trailing and forward AOCF. Its share price, which are highly illiquid based on trading volumes, rose ahead of its annual results and its current level of €1.8 has been confirmed over the last week or so.

Net earnings surged 13% to €15.6m while EPS soared 11% to €0.10 and total shares outstanding dropped less than 1%. The group is carefully managing working capital and capital expenditures. The latter rose to €6.4m from €5.2m in 2014 but was comfortably covered by operating cash flow which almost doubled to €30m versus €16m in the prior year.

Its core air and ocean business unit turned over €676m, up 4.3% year-on-year, despite the “contrary effects of low sea freight rates” which were offset by increased sea freight volumes.

“This growth was achieved on a stagnant and, in some cases, slightly declining market,” Logwin said, adding that, in contrast, it experienced a slight decline in airfreight volumes to due the “overall shrinking market”. Air and ocean is the main contributor to the rise in earnings at group level.

Its solutions unit generated €380m, yielding a 20.6% drop in revenues year-on-year following the disposal of Press Logistics. “High price and competitive pressure” also squeezed volumes, while the retail segment was badly hit as some key costumers experienced “noticeable volume declines.”

Its decent operating performance was also helped by significantly lower costs of goods sold (COGS) – where purchased services costs fell $60m year-on-year. COGS dropped 6.6% to €974m and essentially made up for the fall in revenues.

Source: Transport Intelligence, 9th March 2016

Author: Alessandro Pasetti