Panalpina consolidated quarterly profit off 46pc to US$17.7 million

SWISS forwarding and logistics company Panalpina has posted a 46 per cent year on year second quarter decline in consolidated profit to CHF17.3 million (US$17.7 million) drawn on revenues of CHF1.7 billion, up 2.3 per cent.

Gross profit for the company was CHF363 million, two per cent below the performance of the second quarter of 2011 "despite a globally receding air freight market and several rate increases by ocean carriers that put pressure on margins," said the company statement.

The company said its volume growth in both ocean and air freight was above the average market growth.

"We managed to gain market share. We did better than the market not only in ocean freight but also in air freight where the market declined further in the second quarter of 2012," said CEO Monika Ribar.

"In ocean freight, the carrier's steep rate increases on important routes caused margin headwinds but thanks to our record volumes we could still increase the division's gross profit," she said.

In Latin America, its gross profit grew a 7.5 per cent to CHF43 million. But gross profit in Asia Pacific fell 3.8 per cent to CHF75 million due to "slowing experts to mature markets." And in the Europe, Middle East and Africa (EMEA) region, the gross profit also decreased 2.2 per cent to CHF179 million. In North America, the gross profit was also down 5.7 per cent to CHF66 million.

During the period, Panalpina shipped seven per cent more containers year on year, growing twice as fast as the market, which it said to have grown three per cent in the quarter.

But its gross profit per TEU decreased five per cent "as carriers enforced considerable rate increases, particularly on Far East westbound routes", said the company statement. The company also said rate increases could not yet be fully passed on to customers in the second quarter. In ocean freight, a market growth of three to four per cent is expected.

In air freight, again Panalpina performed better than the market, the company said, with volumes falling three per cent, which was lower than average four per cent market-wide drop.

"We anticipate a soft recovery of the air freight market in the second half of 2012 and continued market growth in ocean freight. Further significant rate increases in air and ocean freight seem unlikely," said Ms Ribar, adding that the air freight market is likely to shrink one per cent for the whole year.

The gross profit for the company's logistics business was CHF91 million in the second quarter, increasing only one per cent, which "reflected the slowing economic environment," said the company statement.