EU fine turns operating profit into loss for Panalpina

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Provisions for the EU and Swiss antitrust fines of CHF 59 million (£40m) resulted in a first quarter loss of CHF 40m (£27m) for Panalpina.

The company has decided to appeal against the European Commission’s decision to the European General Court. “We believe the amount is not justified,” said CEO Monika Ribar.

Underlying operating profit (EBITDA), which excludes the impact of the fine, was down from CHF 55.6m (£37.6m) in the first quarter of 2010 to CHF 34.4m (£23.3m). Group sales at CHF 1.54bn were down from CHF 1.65bn in the first quarter last year.

Ocean freight was a bright spot with volumes up seven per cent – reaching a record high for the company.

Volumes in Air Freight were down eight per cent affected by a negative market and the profitability restoration programme.

“While we did very well in ocean freight, gaining market share, we knew that the first quarter would be a difficult one for air freight, especially in comparison to last year’s exceptional first quarter,” said Ribar.

In Logistics, profitability improvement initiatives in warehousing and distribution showed first positive effects. Organically, gross profit grew solidly by 4 per cent and reached CHF 90m (£61m).

“The economic environment remains volatile and visibility low, but we remain confident that we can reach our targets“, said Ribar. “We have acquired a lot of new business and demonstrated cost discipline. The focus on group-wide cost containment measures and productivity increases will continue. At the same time it is crucial that we keep investing in sales, logistics and IT.”

Panalpina expects the air freight market to decline in the first half of 2012 resulting in an anticipated market growth of 0 per cent for the full year. In ocean freight, Panalpina expects a market growth of 4-5 per cent. The Group’s target is to outperform the market – in air freight as of the second quarter.

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