Swiss based Panalpina has become the latest forwarder to announce a strong set of figures for the first quarter of 2007, with profits doubling year-on-year.

Thanks to a strong first-quarter momentum and further significantly enhanced profitability, the global transport and logistics group Panalpina continues its very successful development. While gross profit increased by 18.9%, Ebit grew by a remarkable 93.9% and net earnings even by 109.0%.

“Our solid performance and continued efforts to further improve profitability met with a soaring demand from global markets, culminating in March to become the so far strongest month in the Company’s history”, commented Chief Executive Monika Ribar. “These very satisfying figures, which are even above our expectation, were positively impacted by an overall growth of customer business, the full deployment of business wins already contracted in 2006 and 2007 and a very favorable development of project-related business.”

Net revenue growth was held back by softer rates and higher fuel charges to grow by just 6.6% to CHF1,954m (€1,185m). However EBITDA grew by 73.4% to CHF87m (€52.7m) and EBIT by an extraordinary 93.9% at CHF74.2m (€45m).

All segments of Panalpina’s business performed well. Despite weakening on some routes, both sea freight and airfreight increased their volumes by 13%. The Supply Chain Management business did even better with a 24% leap in gross profit driven by strong demand in oil and gas as well as in sectors such as high tech.

Strong performance on a global basis…
The excellent development of the contribution margin (gross profit) was jointly achieved by all four reporting regions with increases of 6.1% in Central and South America, 17.1% in North America, 14.8% in Asia / Pacific and even 22.7% in Europe / Africa / Middle East / CIS. The growth in net forwarding revenue (+6.6%) was slowed down by external factors such as rate development, lower fuel surcharges and, in the case of North America, by negative currency impacts.

… and in all key activities
All key activities contributed to the increase in gross profit, with air freight +25.3%, ocean freight +6.1% and supply chain management +24.2%. Air and ocean freight activities showed a continued growth well above the market. Air freight tonnages grew by 13% (market +3 to 4%) while ocean freight volumes increased by 12.9% (market about +10%). In supply chain management, Panalpina keeps reshaping its portfolio, focusing on higher added-value services and customer profitability.

New business in all industry verticals
In each of the oil and gas, the automotive, the healthcare, the retail and fashion, and the hi-tech sectors, which are Panalpina’s strategic key industries, further interesting new contracts were signed.

Free cashflow more than tripled
Net operating cashflow increased by 178% to CHF 113 million as a consequence of the better overall result and improved net working capital management. Free cashflow has grown to CHF 104 from CHF 30 million one year ago.

Positive outlook
With this strong start to the year, Panalpina is very confident in meeting its targets for 2007. The Group expects further solid growth as economies keep developing strongly on a global scale and fuel the demand for worldwide transport and logistics services.

Gerhard Fischer: Great achievements…
“I am, of course, very satisfied to end my career of over 42 years at Panalpina with such convincing figures,” commented Chairman Gerhard Fischer. “To know that the Group stands on a solid basis and that the experienced management and our dedicated staff will continue to build the successful future of Panalpina allows me to retire with confidence.” Gerhard Fischer will hand over to Chairman Designate Rudolf W. Hug after the Annual General Meeting on 15 May 2007. He served Panalpina as CEO from 1987 to 1995 and was instrumental in shaping the Group into one of the global market leaders in transport and logistics solutions. Under his subsequent Chairmanship, the Group prospered in every respect; tripled its net forwarding revenue, grew the number of staff by 50% and the gross profit per employee by a convincing 47%.

… and strategic landmark decisions
Among Gerhard Fischer’s accomplishments was the landmark decision to concentrate on intercontinental air and ocean freight transport and, subsequently, on supply chain management services. He was also instrumental in establishing the Group as the market leader for logistics services to the oil and gas industry. Further to this, Panalpina owes to Gerhard Fischer not only its asset-light business model, which has been very successful ever since its introduction, but also the well-received IPO at the SWX Swiss Exchange in 2005. “Both shareholders, management and staff of Panalpina are greatly indebted to the transport and logistics pioneer Gerhard Fischer, who hands over a sound and well-positioned company with a very promising future”, comments Chairman Designate Rudolf W. Hug.

Source: Panalpina

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