EU antitrust fine turns Panalpina operating profit into US$43 million loss

2012 05 07

ANTITRUST fines from the EU and Swiss authorities totalling CHF59 million (US$64 million) has resulted in a CHF40 million first quarter loss for Switzerland's Panalpina Group.

First quarter gross profit amounted to CHF364 million, a fall of three per cent drawn on revenues of CHF1.5 billion, up seven per cent. Gross profit margin increased to 23.6 per cent.

Asia Pacific showed continued growth for Panalpina going into 2012. First quarter gross profit in this region reached a new record of CHF78 million, an increase of four per cent.

Latin America also posted growth. Currency adjusted, gross profit in this region was up by 2.4 per cent at CHF40 million.

Weak consumer markets persisted in Europe, the Middle East and Africa leaving gross profits at CHF178 million, and CHF68 million for North America.

Ocean freight volume was up seven per cent year on year, reaching record highs and "continued to outperform the market", but air freight was down eight per cent reflecting the weakness of the wider market, said the company statement.

"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 Panalpina CEO Monika Ribar.

Panalpina said it expects the air freight market to decline in the first half of 2012 resulting in a zero growth market for the full year. In ocean freight, Panalpina expects a market growth of four to five per cent. "The group's target is to outperform the market - in air freight as of the second quarter," said the statement.

Panalpina said it will appeal the European Commission's antitrust fine. "We believe the amount is not justified; we are going to appeal to the European General Court," said Ms Ribar.

Panalpina was fined with others by the EC for antitrust violations in air freight surcharges made before 2008.

"The economic environment remains volatile and visibility low, but we remain confident that we can reach our targets," said Ms Ribar. "We have acquired a lot of new business and demonstrated cost discipline."

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