Panalpina sees profits fall as revenue climbs

Panalpina, the Basel, Switzerland-based freight transport and logistics group, had profit of 76.7 million Swiss francs ($73 million) in the first half of the year, down 29 percent from the first half of 2007.

Revenue rose 4.4 percent to 5.2 billion Swiss francs ($4.9 billion). The company said it gained market share in both the air and ocean freight sector.

Panalpina said its bottom line was impacted by the situation in Nigeria and its domestic service portfolio would be withdrawn from the country and taken over by local investors.

Last year Panalpina suspended part of its service offering in Nigeria, including its temporary importation services for oil and gas customers, while U.S. authorities conducted a bribery probe.

In view of the group's future development, the withdrawal from Nigeria is in the company's best interest, said Monika Ribar, the country's chief executive officer Admittedly foreign companies operate in an ongoing uncertain and hard to assess legal environment in Nigeria. This makes it difficult for Panalpina to offer both a comprehensive service portfolio and at the same time meet the high ethical standards as outlined in Panalpina's code of business conduct, Ribar said. The company was content with the first half, particularly in view of the slowing down of the worldwide economy towards the end of the period, she added.

Factors such as the global finance crisis and the rising prices of raw materials have affected investment and consumer behavior in many countries and therefore growth in air and ocean freight has also slowed. Despite this we increased transport volumes and net forwarding revenue compared to the extraordinarily strong first half of 2007, she said. This is a strong indication that our company is very customer-focused and close to the market.

Panalpina Group said its net forwarding revenue in the first six months was up 7.8 percent, and when this was adjusted for currency fluctuations was up 17.5 percent from the same period of 2007.

The company said it saw an increase in air freight tonnage of 6.1 percent and ocean freight volumes as measured in TEUs of 9.4 percent. 

Source: American Shipper