Panalpina not worried by threat of takeover

The CEO of Panalpina has asserted that his company is not “a takeover target”. Speaking to the Swiss newspaper ‘Finanz und Wirtshaft’, Peter Ulber commented that he saw the company more as a purchaser of assets than the other way around. He also observed that the founding shareholder of Panalpina, the Ernst Goehner Foundation, still retains over 40% of the equity of the company and without their support, a takeover was not possible.

However, the fact that he has to defend his company from such questions illustrates the problems Panalpina is facing.

The figures over the past quarter were troubling. Seafreight forwarding fell to a loss of CHF2.9m for the quarter despite a 2% increase in volume, with the negative result being driven by higher internal expenses and gross-profit per TEU falling slightly.

Panalpina’s traditionally strong business in air freight forwarding did better, with an 8% increase in volume. Profits measured in terms of Earnings Before Interest and Taxes (EBIT) were CHF30.3m for the quarter, up from CHF26.9m in Q3 2016. This better profit number reflected a rise in terms of EBIT/gross profit to 18.8%, up from 11.8% in the first quarter of the year. 

The frequently troubled Logistics division saw revenue up, but EBIT was down slightly quarter on quarter at CHF 2.7m. However, this business remains in much better shape than last year with profits-to-date at CHF8.1m compared to 2016 number of CHF1.2m.

Overall Earnings before Tax for the third quarter 2017 was CHF29.7m compared to CHF32.5m for the same period in 2016.

The problem that Peter Ulber faces is not an immediate one, with the company remaining in the black and financially robust. Rather it is one of momentum, with Panalpina’s results lagging behind its rivals. He may be right in saying that a stronger IT system will improve the company’s operational performance, however, this has to deliver results reasonably quickly and SAP systems have a history of being difficult to bed-in.

Author: Thomas Cullen


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