Panalipna Profit Misses Estimates on Asia-Europe Volume

Panalpina Welttransport Holding AG, the world’s fourth-largest freight forwarder, said second-quarter profit fell 37 percent, a larger drop than analysts estimated, as trade between Europe and Asia slowed.

Earnings before interest, taxes, depreciation and amortization declined to 33.6 million Swiss francs ($34.3 million) from 53.7 million francs a year earlier, the Basel, Switzerland based company said today in a statement. Profit was less than the 32.8 million-franc average of nine analyst estimates compiled by Bloomberg. Revenue gained 2.4 percent to 1.67 billion francs.

A slowing global economy is a concern for Panalpina, Chief Executive Officer Monika Ribar said in a telephone interview. “If demand starts to slow down, the euro crisis is only a part of it,” she said. “There is also a risk from the slowing economy in the U.S.”

Industry leader Kuehne + Nagel International AG scaled back its full-year forecasts for sea freight, air freight and contract logistics in mid-July. The Schindellegi, Switzerland-based company now expects a 3 percent decline in the air-cargo industry compared with a previous forecast of no change.

The air-freight market will contract by 1 percent this year, while the ocean freight market will grow 3 percent to 4 percent, Panalpina said today.

Hot Competition

“The competition is picking up,” CEO Ribar said, adding there is little the company can do to combat pricing pressure. “On the air freight side, the cake is shrinking a little bit, so you feel more competition.”

Panalpina fell as much as 1.6 percent and was down 1 percent at 88.25 francs as of 9:05 a.m., extending the decline this year to 8.3 percent.

Global air-freight prices fell to $3.60 per kilogram in the second quarter, the lowest in at least two years, according to the Drewry Air Freight Price Index, which analyzes average prices along major trade routes.

European air-freight volume fell the most since 2009 in the three months through June, while in Asia it fell for a sixth consecutive quarter, according to the International Air Transport Association.

Panalpina’s second-quarter Ebitda in the Asia-Pacific region fell 35 percent to 15 million francs, while the Europe, Middle East and Africa division had a loss of 1 million francs versus a profit a year earlier of 9 million francs. In North America, a 2 million-franc loss compared with a 9 million-franc profit a year earlier.

The company may consider small acquisitions, particularly in Asia and the U.S., Ribar said in the interview. “We are looking at specialties, small things that could add either to our know-how and talent base, or that could strengthen us in either geographies or industry verticals,” she said, adding that Panalpina focuses on organic growth.

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