Panalpina Q1 EBIT falls 7.4% for air segment on heels of DSV purchase

Today, Panalpina released its first-quarter results for 2019, following its recent acquisition by its fellow-Swiss rival DSV, in which it delivered double-digit growth in operating profit of 15% to $US28.1 million, year-over-year. However, performance was a bit less eye-popping when breaking down the results segment by segment.

Its Air Freight segment saw volumes increase by a healthy 8% over the same period, which Panalpina said was largely “driven by acquisitions.” But EBIT specific to the segment showed a decrease of about 7.4%, from $24.7 million in Q1 2018 to $26.6 million for Q1 this year, despite said volume growth.

Results from its Ocean Freight and Logistics segments were also mixed. Ocean Freight volumes decreased 3%, but it finally brought its EBIT within the segment out of the red – growing from a  $5.7 million loss to gains of about $300,000, which the company said was thanks to “strong cost control.” Also, the quarterly EBIT earned from its Logistics segment dipped from about $3.4 million to $2.9 million, y-o-y.

CEO Stefan Karlen said that the company has continued to win new business since the merger was announced, and that Panalpina is “determined to keep doing so in the weeks and months ahead.”

The company also had a meek end to the 2018 year. It took a notable hit to operating profit within its airfreight segment during fourth quarter, which it said was due to company’s adoption of new leasing standards, in compliance with Swiss law, on top of an underwhelming peak season.

“Since the news of DSV taking over Panalpina broke, circumstances have changed,” Karlen said. “However, Panalpina continues to conduct business as usual.”