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Panalpina H1 profits fall 51.3pc to US$22 million as sales drop 11.7pc

SWISS forwarding giant Panalpina's first half net profit fell 51.9 per cent year on year to CHF21.8 million (US$22.11 million), drawn on revenues of CHF2.6 billion, which declined 11.7 per cent.

Panalpina blamed the profit drop on a one-off loss of CHF26.1 million in charges related to a capacity realignment in the company's oil and gas division.

"In all but oil and gas, our business has shown good momentum and we expect this to continue throughout the year. Cost control remains a priority as we continue to balance our business and product mix," said Panalpina CEO Peter Ulber.

Excluding one-off costs, the company posted an adjusted consolidated profit of CHF47.9 million, a 5.7 per cent increase from CHF45.3 million in first half 2015.

"During the second quarter it became evident that the oil and gas business will not bounce back any time soon," said Mr Ulber.

"Therefore, we decided to realign our capacities with the current volumes and not wait for the market to recover. We took the full restructuring costs in the second quarter instead of later.

"The encouraging news is that the rest of the business continued to show growth against the backdrop of receding markets in air and ocean freight with underlying profitability remaining stable for the first half," he said.

Panalpina's air freight volumes jumped eight per cent year on year, from volumes of acquired companies. As a result of higher volumes of perishables but lower volumes in the oil and gas sector, gross profit per ton dipped 4.2 per cent to CHF690, while gross profit ticked up 3.7 per cent to CHF304.5 million.

Reported profit before interest and taxes (EBIT) for the air freight division stood at CHF33.1 million in the first half, down 28 per cent from CHF46 million the previous year.

Ocean freight volumes dropped nine per cent compared with the first half 2015 in a market that contracted only one per cent overall.

Gross profit per TEU increased eight per cent to CHF323, resulting in a gross profit of CHF232.9 million, down 1.9 per cent from last year.

Reported EBIT in ocean freight fell from CHF12.8 million in the first half 2015 to CHF1.3 million in 2016.

Panalpina's contract logistics division saw gross profits slip to CHF198.9 million in the first half of the year from CHF205.2 million in 2015. Logistics posted a reported EBIT of CHF300,000 compared with CHF1.5 million in the same period last year.