Panalpina's third quarter sea freight volumes rise, but air freight slips

PANALPINA Group has reported mixed results for the third quarter of 2012, with gross profit increasing by seven per cent year on year to CHF379 million (US$403 million).

The result was driven by a solid performance in logistics and ocean freight, but it was negatively impacted by a weak performance in air freight. This was the highest quarterly gross profit in almost two years.

Gross profit for the first nine months of 2012 amounted to CHF1.1 billion, up 1 per cent. Third quarter EBITDA came in at CHF18 million.

"Ocean freight continued with historic record volumes and our investments into logistics have clearly started to pay off as more and more customers entrust us with value-added logistics services. On the other hand, our performance in air freight was disappointing," said CEO Monika Ribar.

The group's net forwarding revenue in the third quarter increased 10 per cent year on year to CHF1.7 billion.

The Americas region (formerly North America and Latin America) recorded the highest quarterly gross profit (CHF119 million) in this region in almost four years. In the EMEA region, weak imports were partly offset by strong exports, resulting in a quarterly gross profit of CHF183 million. Gross profit in Asia Pacific decreased year-on-year to CHF78 million due to declining exports to Europe. The group's gross profit margin decreased slightly to 22 per cent in the third quarter, a group statement said.

Further market share gains in ocean freight led to the highest quarterly and year-to-date volumes ever in the groups history. For the first time, the group forwarded more than one million TEU in the first nine months of the year.

Volumes in the third quarter were up five per cent compared to the previous year. Gross profit per TEU of ocean freight increased six per cent year on year and improved quarter-on-quarter as the carriers' rate increases were passed on to customers in the third quarter. Gross profit in ocean freight reached CHF122 million in the third quarter.

The air freight volumes decreased by eight per cent compared to the previous year. Europe-related trade lanes were hit hardest and particularly customers in hi-tech, telecom and chemicals shipped significantly less by air. In addition, the trend towards smaller shipments was accentuated. Gross profit per ton of air freight increased by four per cent year-on-year and remained stable quarter-on-quarter. Gross profit in air freight amounted to CHF158 million in the third

Looking ahead, Panalpina said it expects the air freight market to contract by 3-4 per cent for the whole year. In ocean freight, a market growth of 2-3 per cent is expected.