Panalpina’s second quarter profit tumbled 37.5 percent from a year ago, but the Swiss logistics and freight forwarder boosted its ocean and air freight market shares.
Earnings before interest, tax, depreciation and amortization declined to 33.6 million Swiss francs ($34.3 million) from 53.7 million francs ($54.8 million).
Operating profit fell 47 percent to $23.4 million, and gross profit after deducting customs, security charges and freight rates eased 2 percent to $370.6 million. Net forwarding revenue was up 2.4 percent at $1.7 billion.
“We managed to gain market shares. We did better than the market not only in ocean freight but also in air freight where the market declined further in the second quarters,” Panalpina CEO Monika Ribar said. “In ocean freight, the carriers’ steep rate increases on important routes caused margin headwinds, but thanks to our record volumes, we would still increase the division’s gross profit.”
Ocean container traffic rose 7 percent to a record high in the second quarter, growing more than double the 3 percent market growth. But gross profit per 20-foot container declined 5 percent as ocean carriers pushed through significant rate increases, particularly on westbound shipments from Asia to Europe.
Panalpina couldn’t fully pass on the increases to shippers, but the lower unit profitability was more than offset by higher volumes that boosted gross earnings to $114 million.
Air freight volume contracted 3 percent in the quarter, outperforming the market’s 4 percent decline, but resulting in a 6 percent drop in the division’s gross profit to $165 million.
“We anticipate a soft recovery of the air freight market in the second half of 2012 and continued market growth in ocean freight,” Ribar said.” Further significant rate increases in air and ocean freight seem unlikely.”
Panalpina said it plans to outperform both the air freight market, which it expects to contract by 1 percent for the full year, and the ocean freight market, which is set to grow 3 to 4 percent.
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