Switzerland-based forwarder Panalpina released its financial results for the first quarter of the year, reporting increases in overall profitability, with earnings before interest and taxes (EBIT) up in its Air Freight and Contract Logistics divisions, but down in its weakening Ocean Freight division.
Overall EBIT came in at US$25 million, a 49 percent increase year-over-year – the Air Freight division bringing in US$28 million and Contract Logistics bringing in US$86 million, rising 57 percent and 41 percent respectively.
Air freight volume increased 3 percent, contributing to a rise in EBIT-to-gross-profit margin to 15 percent compared to 12 percent in the first quarter of 2017. The company’s total EBIT of US$25 million – which is notably lower than the Air Freight division’s total – was brought by the continued slump in the company’s Ocean Freight division, which reported an operating loss of US$6 million – double the 1Q17 loss of $3 million – as volume declined 4 percent.
CEO Stefan Karlen highlighted that profitability per TEU increased in Ocean Freight despite the decrease in volume moved, which he attributes to the loss of a single large contract, but we note that Panalpina’s ocean volumes have been declining for some time.
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