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Panalpina sees freight growth slowing in Q4
Panalpina still outgrows market, sees slower Q4.
November 4, 2010 2:18 by Reuters
Swiss logistics group Panalpina sees freight growth slowing in the fourth quarter after its third-quarter gross profit growth just missed expectations.
The group, which competes with Kuehne & Nagel , continued to outpace the market with nine-month volume growth of 27 percent for air and 16 percent for ocean freight.
It reiterated on Thursday its forecast for 2010 market growth of at least 15 percent in air cargo and 10 percent in ocean freight.
However it said the market began to slow in the third quarter due to less restocking activity, a higher comparison base and a shorter-than-usual peak season in ocean freight.
It saw volume growth decelerating in the fourth quarter.
“The peak season for air freight will only be moderate and in ocean freight, the peak season is already over with restocking having taken place early as businesses attempted to avoid shortages and anticipated peak season rates,” it said.
Freight demand fell sharply in 2009 due to the global recession but the World Trade Organisation is forecasting a record 13.5 percent rise in international trade this year.
Panalpina reported gross profit rose 13 percent to 382 million Swiss francs ($393 million) versus a forecast for 391 million in a Reuters poll of analysts.
Panalpina shares, which rose on Wednesday to their highest since June 2008, were down 2.3 percent at 125.50 francs by 1015 GMT, compared to a 0.9 percent rise for larger rival Kuehne & Nagel, which beat estimates last month for its third-quarter profit.
“While third-quarter results were not fully up to our expectations, Panalpina continued to benefit from strong global freight volume growth during the quarter and exceeded market growth rates,” said Vontobel analyst Michael Foeth.
Panalpina said it had agreed in the quarter to pay a fine of $12 million to settle a U.S. anti-trust probe and said it expected to settle with separate U.S. investigations into foreign bribery charges by the end of the year.
It said both cases were covered by a 128 million Swiss franc charge it took in the second quarter, although that did not include ongoing anti-trust investigations in Switzerland, the European Union, New Zealand and Brazil.
The U.S. Department of Justice and the Securities and Exchange Commission are investigating whether Panalpina paid foreign officials to speed drilling rigs and other equipment through customs, the Wall Street Journal reported last month.
The alleged bribes occurred in countries including Saudi Arabia, Nigeria, Algeria and Kazakhstan and has extended to some of Panalpina’s clients, including Shell .
(Reporting by Emma Thomasson; Editing by Michael Shields)