Panalpina sees small profit amid 2015’s soft market

Although global freight forwarder and logistics company Panalpina suffered a drop in revenue, from $6.73 billion to US$5.88 billion in 2015, the Swiss company’s EBIT moved edged up from $117.1 billion to $117.6 billion at the close of last year, while net profit rose slightly to $88.5 billion from $86.79 billion in 2014.

These results are not bad, considering Panalpina relies hard on its business serving the oil industry. “We have maintained profitability in a year that was characterized by a soft market, the low oil price, negative currency impacts and high IT investments on our end,” said Peter Ulber, Panalpina’s CEO. “The results prove our resilience in more difficult times. Excluding currency effects, EBIT even increased 15 percent.”

The company’s airfreight volumes decreased 2.5 percent last year in a market that is estimated to have contracted by 1 percent. Not only oil and gas, but the automotive industry created lower cargo volumes for Panalpina. The company transported 836,200 tonnes of air cargo last year, slightly less than the 857,800 tonnes transported in 2014.

According to The Wall Street Journal, Ulber doesn’t expect significant growth or momentum coming from the market, especially in the first two quarters of 2016. Ulber predicted that the global airfreight market will grow 1 to 2 percent this year over 2015. “We have maintained profitability in a year that was characterized by a soft market, the low oil price, negative currency impacts and high IT investments,” Ulber said.

Ulber said the focus will be on implementing Panalpina’s new IT system, and that he had no interest in engaging in any acquisitions right now. “It is true that Panalpina will choose not to participate in consolidation among larger players,” he said. “We think it is much more important to get our new technology environment in place rather than getting involved in a complex acquisition.”