Damco, the logistics unit of the A.P. Moller–Maersk Group, posted increases in first quarter volume, revenue and gross profit, but the company’s earnings before interest and taxes slipped because of restructuring charges.
Revenue rose 8 percent to $738 million. Gross profit increased 8 percent to $190 million. Operating profit was flat at $7 million. Earnings before interest and taxes totaled $13 million, compared with $16 million a year earlier.
Ocean volumes increased 6 percent year-over-year, while Damco’s air freight tonnage more than doubled. The increase in air freight volume was aided by the acquisition last August of Chinese air freight forwarder NTS, but excluding NTS, Damco’s air freight volume rose 37 percent in a declining overall market.
Supply chain management volume was flat, but Damco said the addition of several new customers in the first quarter is expected to improve results starting in the second quarter.
“I am pleased to see that we are making good progress under difficult market conditions. Our growth bears testament to the resonance our supply chain services are finding with customers,” Damco CEO Rolf Habben-Jansen said in a statement.
Damco’s profit was affected by costs related to a restructuring of the company’s European operations.
“We will absorb additional cost in the first two quarters because of the restructuring of our European region into East and West,” Habben-Jensen said. “This is the right thing to do to position us for the years to come. When the changes are all implemented at the end of Q2, Damco will be in a stronger position to address the very different needs of these diverse markets.”