In spite of a new CEO, a restructuring plan and new facilities popping up across the globe, UTi Worldwide, the 85-year-old, U.S.-based supply chain management company, continues to lose money.
In its fourth quarter and fiscal 2015 reports, which were released March 31, net losses for UTi Worldwide rose sharply, from $83.3 million $203.2 million, year over year. Earnings for UTi, before interest, taxes, depreciation and amortization (EBITDA), excluding severance and other costs, decreased from US$90.7 million in fiscal 2014 to $20.2 million in fiscal 2015..
“Fiscal 2015 was a challenging year for the company,” said Edward Feitzinger, CEO, who took over from Eric Kirchner earlier this year. “Our results for the fourth quarter were particularly disappointing and included a number of one-time charges that stemmed from our January restructuring and reorganization efforts. Importantly, the fourth quarter represents the final chapter under the prior playbook. Starting in late January, we began implementing our new strategic direction for our freight forwarding business.”
Indeed, fourth-quarter EBITDA for UTi was negative $45.2 million, compared to positive $1.6 million for the same period in the prior year. Net revenues for freight forwarding decreased 29.7 percent, year over year, to $118.3 million in Q4 2015, , compared to $168.2 million in the prior year period.
However, the company remains upbeat as it predicts adjusted EBITDA to be within the range of $125 million to $150 million in fiscal year 2016. It also expects a year-over-year reduction in working capital in the range of $175 million to $200 million.
Earlier this year, UTi opened a Good Distribution Practices facility in Rome, Italy, near Fiumicino-Leonardo da Vinci International Airport, and late in 2014 UTi earned a CEIV Pharma (Center of Excellence for Independent Validators – Pharmaceuticals) certification via IATA’s training program at Brussels Airport. Now UTi’s Frankfurt office is relocating its Cargo City South to a facility that better serves clients, particularly in the pharmaceutical industry. The new facility will have 9,800 square feet of office space, 22,000 square feet of warehouse space, 10 truck docks, 10-foot and 20-foot roller beds, and a 20-foot-by-13-foot ramp for direct goods delivery. The facility will be equipped to handle cold-chain cargo meeting GDP standards.
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