Panalpina reports Q3 contractions, anticipates further challenges
Swiss forwarder Panalpina’s third-quarter financial results show the company is being affected by “macroeconomic uncertainties,” CEO Stefan Karlen said. Its cross-segment profit during the quarter declined by about 19 percent to US$14.9 million, compared to US$18.5 million during the same period last year.
The company said the air freight segment’s margins have been impacted by increased air freight rates during 2018 H1, and that it expects to see the trend continue through the end of the year. While air freight is still its biggest earner of its three segments, it suffered an 11 percent decrease in operating profit (EBIT) to $26.8 million from $30.1 million in Q3 2017. Year-to-date, however, its air freight sector has still improved on 2017 performance, with volumes up 4 percent and EBIT increasing 15 percent to $80.2 million from the first nine months of 2017.
Panalpina’s logistics segment also saw a year-over-year contraction in Q3 –EBIT fell from $2.7 million to $1.6 million, representing a 42 percent decline compared to Q3 2017.
Its ocean freight segment, however, has pulled itself out of the red, improving from a $2.9 million loss in EBIT in Q3 2017 to $132,000 in EBIT for Q3 2018.
The company has warned of potential impediments to supply chain fluidity, like the increasing congestion at European airports aggravating operations like customs clearance and ground handling. It is also anticipating some impact from protectionist trade policies that could affect trans-Pacific trade, its most profitable region of business.
“Due to macroeconomic and political uncertainties, it is challenging to accurately predict the dynamics of the air freight peak season and the impact on rates and volumes this year,” Karlen said, “but we have prepared meticulously… The volatile freight forwarding environment is a constant reminder that we need to do everything in our control to continue to build an organization that is fit for sustainable, profitable growth.”
