July 20, 2016: Panalpina, giant supply chain solution provider, has seen 8 percent increase in air freight volumes in the first six months of 2016, while the market decreased by an estimated 3 percent. Volumes from acquired companies accounted for 6 percent of the air freight growth.
With higher volumes in the perishables sector but lower volumes in the oil and gas sector the gross profit per tonne decreased 4 percent to CHF 690, resulting in a gross profit overall of CHF 304.5 million.
The gross profit remained stable at CHF 736.3 million in the first half of 2016 (HY 2015: CHF 736.1 million). Total operating expenses also remained practically unchanged at CHF 651.0 million (HY 2015: 649.5 million). Adjusted for the oil and gas related restructuring provision of CHF 26.1 million, EBIT reached CHF 60.8 million (reported HY 2016: CHF 34.7 million; HY 2015: CHF 60.4 million).
Significantly lower volumes in oil and gas and a discontinued high-volume contract meant that Panalpina’s ocean freight volumes in the first half year decreased 9 percent year-on-year while the market shrank by an estimated 1 percent.
However, gross profit per TEU increased 8 percent to CHF 323 (HY 2015: CHF 299), resulting in a gross profit overall of CHF 232.9 million (HY 2015: CHF 237.3 million).
“During the second quarter it became evident that the oil and gas business will not bounce back any time soon. Therefore we decided to realign our capacities with the current volumes and not wait for the market to recover. We took the full restructuring costs in the second quarter instead of later,” says Peter Ulber, CEO, Panalpina.
“The encouraging news is that the rest of the business continued to show considerable robustness against the backdrop of receding markets in air and ocean freight. The underlying profitability remained stable for the first half year.”
The Group’s Logistics gross profit stayed virtually stable with a gross profit of CHF 198.9 million in the first half-year. Logistics posted an adjusted EBIT of CHF 4.1 million for the first six months of 2016, compared to CHF 1.5 million in the same period of last year.
“We still consider the oil and gas industry as a strategic business and are confident that we have taken the right measures in a market that is slowly stabilizing,” says Ulber.
“In all other industries, our business has shown good momentum and we expect this to continue throughout the year. Cost control remains a key priority as we continue to balance our business and product mix.”