Panalpina Net Income Tumbles Almost 50 Percent

LONDON – Panalpina almost halved net earnings last year and will cut approximately 10 percent of its workforce amid declining global cargo volumes, the Swiss logistics group said March 12.

Net income fell 46 percent to $98.4 million in 2008 from $181 million in 2007, due mainly to one-off charges for withdrawing from Nigeria. Gross revenue gained just 0.5 percent to $9.2 billion.

Gross profit, a key indicator of performance struck after deducting customs, security surcharges and freight rates, retreated 3.4 percent to $7.65 billion.

Panalpina's Swiss rival Kuehne & Nagel boosted net income in 2008 by 9.1 percent to $503 million.

Zurich-based Panalpina said it would cut between 1,400 and 1,600 jobs across all operations in response to "clearly declining freight volumes caused by the current financial and economic crisis."

"However, no compromise will be made as far as customer services and quality standards are concerned," CEO Monika Ribar said.

Panalpina's headcount shrank by 500 last year to just over 14,800.

Panalpina said it maintained its position as the world's third largest air freight forwarder handling 901,000 tonnes and number four in ocean freight with traffic of 1.278 million TEUs.

"We were able to gain market share in the air freight and ocean freight sectors and won new contracts in all segments," Ribar said.

Supply chain management was particularly affected by the exit from Nigeria and the slump in the automotive sector.

Panalpina withdrew completely from Nigeria last year after it had suspended some operations following a bribery investigation by U.S. authorities.

Ribar said Panalpina is ideally positioned to increase its share of the traditionally very fragmented and currently volatile forwarding and logistics market.

"Our core business remains healthy and we are following a clearly customer focused strategy," she said.