Profit up for Panalpina, despite airfreight earnings fall

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Panalpina has seen year-to-date (YTD) profit increase slightly to 69.3 million Swiss francs ($72.6 million) despite revenue and airfreight earnings before interest and tax (EBIT) falling.

The profit was up from 69.2 million Swiss francs despite revenue falling from 4.9 billion Swiss francs to 4.4 billion Swiss francs. Airfreight EBIT fell to 67.6 million Swiss francs from 85.3 million Swiss francs, which Panalpina says is because it transported less oil and gas and automotive cargo, though perishables increased.

Panalpina chief executive officer, Peter Ulber says: “In the first nine months of the year we succeeded in keeping EBIT and consolidated profit at previous year levels, despite a contracting airfreight market in the third quarter, our exposure to the oil and gas industry and historically high IT investments.”

In the third quarter, revenue fell by 14.9 per cent to 1.4 billion Swiss francs from 1.7 billion Swiss francs. Profit declined by 4.7 per cent in the period from 25.2 million Swiss francs to 24 million Swiss francs.

Panalpina’s airfreight division saw revenue YTD fall from 2.3 billion Swiss francs in 2014 to 1.9 billion Swiss francs in 2015. In the third quarter of 2015 airfreight revenue was 652.6 Swiss francs, down from 793.9 Swiss francs in 2014. Airfreight EBIT in the third quarter was 21.5 million Swiss francs, compared to 28 million Swiss francs during the same period of 2014.

YTD airfreight volumes in 2015 fell to 615,000 tonnes from 629,800 tonnes in 2014. In the third quarter, it fell from 212,500 tonnes in 2014 to 207,200 tonnes this year.

For the future, Ulber says: “The air and ocean freight markets will continue to be soft at best and a rebound of the oil price in the near future seems unlikely … We will accelerate our investments in less cyclical business to further reduce our exposure to certain industries.”