Panalpina reported lower third quarter profit as a strong Swiss franc offset record ocean container volume and strong air freight margins across the Swiss forwarder and logistics group’s global network.
Profit, after subtracting customs, security charges and freight rates, slipped 7 percent from a year ago to $452 million. The company’s profit was up 11 percent after adjusting for the higher value of the Swiss franc against other currencies, notably the dollar.
Earnings declined 8.8 percent year-over-year to $68.8 million, of which $17.8 million was “lost” in currency translation. Forwarding revenue dropped 16 percent to $2 billion from $2.38 billion.
“We did very well, despite fierce competition and a challenging environment. Our focus on sustainable, profitable growth is clearly starting to pay off,” said CEO Monika Ribar.
Panalpina boosted its ocean container market share as traffic jumped 8 percent in July-September to its highest quarterly volume. Gross profit per 20-foot container units decreased, however, by 18 percent due to lower freight rates and a highly competitive environment.
Air freight contracted 6 percent after the cull of unprofitable business in 2010. But the gap to the market average narrowed to less than 3 percent from 8 percent in the second quarter.
The yield on air freight improved 3 percent from a year ago [+ 23 percent currency adjusted] as Panalpina benefited from its focus on higher profit business
Gross profit for the first nine months was up 1 percent [14 percent currency adjusted] at $1.4 billion and earnings before interest, tax, depreciation and amortization increased to $173.9 million from $7.4 million.
The company slightly lowered its full year market growth forecasts to zero for air freight and 4 to 5 percent for ocean freight.
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