Panalpina today announced a dramatic decline in profits in 2009, blaming the harsh economic environment and unexpected volatility of freight rates.
Net forwarding revenue decreased by 32.9% to Sfr7.34bn (US$6.85bn) and gross profit fell by 20.9% to Sfr1.37bn, but consolidated profit plunged by more than 90% to Sfr10m.
The group’s ebitda declined from Sfr241m in 2008 to Sfr80m in 2009.
Panalpina transported 731,000 tonnes of air freight, down 19% on 2008, and 1.1m teu in ocean freight, a fall of 14%.
“On some trade lanes, the development of capacity and the volatility of freight rates were underestimated,” said the company.
It also suffered due to its high proportion of business with large companies that reduced their volumes last year.
Furthermore, its gross profit was negatively affected in the Emea and US regions by the full-year impact of the discontinuation of the Nigerian business, amounting to around Sfr42m.
CEO Monika Robar said: “2009 could hardly have been a more turbulent and challenging year, both for the forwarding and logistics industry, as well as for Panalpina.
“Although we reacted quickly on the cost side and increased productivity, the measures taken could not compensate for the sharp fall in volumes and a rapid increase in buying rates in the second half of the year.
“However, we have taken appropriate actions on the procurement and sales side, as well as on the organisational structure of the company which will positively influence our performance in 2010.”
In terms of outlook, Ribar said: “The overall visibility for 2010 remains low. However, Panalpina believes in a moderate recovery of both the air freight and ocean freight markets with mid single-digit growth rates.”
But she said the Panalpina was confident of at least matching market growth this year.
“In the future, we also commit ourselves to better balance profitability versus pure volume gains,” she added.
She said Panalpina will use its new-found “leadership” in the field of compliance with global regulations – gained through its Nigeria experience – to win back lost business and generate new business, particularly in the oil and gas industry and in industrial projects verticals.
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