Category Archives: Panalpina Air and Ocean

Panalpina reports record year in air freight

Airline Color Scheme - Introduced 2012

International freight forwarding and logistics company Panalpina ended the year 2017 with strong Air Freight volumes and margins, while in the fourth quarter margin pressure continued to impact the financial results in Ocean Freight. For the full year, Panalpina’s reported EBIT increased from CHF 82.0 million (adjusted for restructuring costs 2016: CHF 109.9 million) to CHF 103.3 million and the reported consolidated profit increased from CHF 52.3 million (adjusted 2016: CHF 80.2 million) to CHF 57.5 million. In local currencies, reported EBIT and consolidated profit in 2017 reached CHF 106.0 million and CHF 60.0 million, respectively.

“2017 ended with record high volumes and profitability in Air Freight. We secured extra capacity early on in the year, well ahead of the exceptionally strong peak season when global capacity became scarce. Consequently, we were able to serve our customers in a very challenging market where others failed,” says Panalpina CEO Stefan Karlen. “In Ocean Freight, we kept volumes stable throughout the year, but as margin pressure continued into the fourth quarter, a full-year loss resulted for that part of our business. All in all, 2017 demonstrated Panalpina’s robustness as we continued to go through a period of transformation and disciplined strategy execution.”

Panalpina Group: Results for the Full Year 2017

(CHF million) YTD 2017 YTD 2016
Net forwarding revenue 5,532.8 5,196.0
Gross profit 1,397.8 1,424.6
EBITDA reported 146.2 131.7
EBIT reported 103.3 82.0
Consolidated profit reported 57.5 52.3
Non-recurring items (28.0)
EBITDA adjusted 146.2 159.6
EBIT adjusted 103.3 109.9
Consolidated profit adjusted 57.5 80.2
Earnings per share (in CHF) 2.48 2.29
Dividend per share * (in CHF) 3.75 3.75

* Proposed to the annual general meeting

Higher EBIT and consolidated profit

In 2017, Panalpina’s gross profit decreased 2% to CHF 1,397.8 million (2016: CHF 1,424.6 million), while total operating expenses decreased 1% to CHF 1,251.6 million (2016: CHF 1,265.0 million). Reported EBIT and consolidated profit increased year-on-year, but decreased when compared to respective 2016 figures adjusted for restructuring costs. Reported EBIT reached CHF 103.3 million compared to CHF 82.0 million a year before (adjusted 2016: CHF 109.9 million) and the EBIT-to-gross-profit margin stood at 7.4% up from 5.8% (adjusted 2016: 7.7%). The consolidated profit increased from CHF 52.3 million to CHF 57.5 million. Barring negative currency impacts, reported EBIT and consolidated profit in 2017 reached CHF 106.0 million and CHF 60.0 million, respectively.

Air Freight

Panalpina’s Air Freight volumes increased 8% in 2017. The company transported 995,900 tons of air cargo last year (2016: 921,400), the highest volumes in the company’s history. From January to December, gross profit, unit profitability and EBIT in Air Freight increased with every quarter. Compared to the same period of last year, gross profit per ton decreased 1% to CHF 642 (2016: CHF 646), while overall gross profit increased to CHF 639.4 million (2016: CHF 595.2 million). Reported EBIT in Air Freight increased from CHF 80.8 million (adjusted 2016: CHF 93.5 million) to CHF 110.3 million. The EBIT-to-gross-profit margin came in at 17.3% compared to 13.6% (adjusted 2016: 15.7%) a year before.

Ocean Freight

Panalpina’s Ocean Freight volumes increased 2% year-on-year. Panalpina transported 1,520,500 TEUs (twenty-foot equivalent units) in 2017 (2016: 1,488,500 TEUs). Gross profit per TEU decreased 6% to CHF 281 (2016: CHF 298), bringing gross profit to CHF 427.2 million (2016: CHF 443.8 million). Substantially lower margins, resulting from a challenging carrier environment and moderately increased costs due to the ongoing IT system implementation, meant that Ocean Freight recorded an EBIT loss for the full year of CHF 15.1 million, compared to a loss of CHF 0.6 million in 2016 (adjusted 2016: CHF 10.9 million).

Logistics

In Logistics, gross profit decreased 14% to CHF 331.1 million year-on-year (2016: CHF 385.7 million), but picked up in the fourth quarter while ramp-up costs for various projects and investments in a new facility in Singapore impacted EBIT. For the full year, Logistics posted an EBIT of CHF 8.1 million, compared to CHF 1.8 million (adjusted 2016: CHF 5.6 million) for the same period last year.

Dividend

In light of the solid net cash position, the board of directors will propose an unchanged dividend payment of CHF 3.75 per share to the annual general meeting on May 8, 2018. This is equivalent to a dividend yield of 2.5% (based on the 2017 year-end share price).

Outlook

“The fact that all relevant economic indices are trending upwards makes us reasonably confident for 2018,” says Karlen. “We have made solid progress in Air Freight and reached a good cruising altitude on which we can build and that will allow us to reach the targeted conversion ratio in due course. In Ocean Freight, we know what needs to be done to make it into calmer waters again and in Logistics, the focus remains on top-line growth by further expanding our offering of value-added services.”

Copyright Photo: Panalpina (Atlas Air) Boeing 747-87UF N851GT (msn 37565) (Panalpina on 6 Continents) PAE (Nick Dean). Image: 908884.

Panalpina aircraft slide show:

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Atlas Air Worldwide Holdings reports 1Q net income of $5.9 million

Atlas Air Worldwide Holdings, Inc. (Atlas Air) (New York-JFK) today announced adjusted net income attributable to common stockholders of $5.9 million, or $0.22 per diluted share for the first quarter of 2013 compared with adjusted earnings of $13.6 million, or $0.51 per diluted share, for the first quarter of 2012.

On a reported basis, net income attributable to common stockholders in the first quarter totaled $20.1 million, or $0.76 per diluted share, compared with $12.8 million, or $0.48 per diluted share in the year-ago quarter.

Adjusted earnings in the first quarter of 2013 exclude an income tax benefit of $14.2 million, or $0.54 per diluted share, related to the tax treatment of extraterritorial income from the offshore leasing of certain aircraft. Adjusted earnings in the first quarter of 2012 exclude fleet retirement costs of $0.9 million, or $0.03 per diluted share.

First-quarter revenue grew 5% to $377.3 million, with operating income increasing 10% to $22.6 million and operating margin expanding slightly. Free cash flow for the period totaled $42.4 million compared with $1.0 million in the first quarter of 2012.

“Our first-quarter results and initiatives demonstrate the benefits of a modern, efficient fleet, diversified business mix and solid balance sheet in a challenging business environment,” said William J. Flynn, President and Chief Executive Officer.

“Operating income during the quarter reflected the strength of our ACMI operations, especially our new 747-8 freighters. It also gained from new organizational capabilities and the evolution of our business, such as our expanding 767 service and growing CMI operations. We also realized operating efficiencies through our continuous improvement initiatives.

“Capitalizing on our financial strength, we acquired an immediately profitable 777 freighter under long-term customer lease for our Dry Leasing business. We also implemented an immediately accretive share repurchase program that acquired 3.4% of our outstanding stock for a total of $36.5 million through late April.

“Earnings in the first quarter were in line with our expectations and our outlook for the year. As a result, we are affirming previous guidance for 2013 but we are raising our expected adjusted earnings per share to $4.80 from $4.65 to reflect our actual and anticipated share repurchases.”

First-Quarter Results

Revenue, volume and profitability growth in our core ACMI business during the first quarter were driven by our new 747-8Fs, with four additional -8F aircraft in service compared with the first quarter of 2012, as well as the continued ramp up of CMI flying for Boeing and DHL Express.

Improved ACMI segment earnings during the period also benefited from higher rates per block hour and lower maintenance expense for our 747-8Fs, partially offset by the redeployment of 747-400 aircraft to other business segments.

In AMC Charter, strong growth in passenger service volumes partially offset a 41% reduction in cargo block hours, a reduction in the number of one-way AMC missions, and lower average cargo revenue per block hour, which led to a decline in segment contribution. Lower average passenger revenue per block hour during the period stemmed from an increase in flying on smaller-gauge 767 aircraft added to supplement our wide-body 747-400 passenger service and enhance our share of military passenger business.

Segment results in Commercial Charter reflected the seasonal nature of this business and were primarily related to a reduction in yields driven by soft first-quarter global charter-market conditions.

Results in the first quarter were also affected by higher non-operating expenses, primarily due to a reduction in capitalized interest on 747-8F aircraft that entered service.

Income Taxes

Reported earnings for the first quarter of 2013 included an effective income tax rate benefit of 97.4%, reflecting a federal income tax benefit of $14.2 million related to the tax treatment of extraterritorial income from the offshore leasing of certain of our aircraft.

Cash, Cash Equivalents and Short-Term Investments

At March 31, 2013, our cash, cash equivalents and short-term investments totaled $343.9 million, compared with $419.9 million at December 31, 2012.

The change in cash, cash equivalents and short-term investments was primarily driven by an increase in cash provided by operating and financing activities, offset by cash used for investing activities.

Net cash used for investing activities in the first quarter of 2013 primarily related to the purchase of a 747-8F aircraft for our ACMI operations and a 777-200 LRF aircraft for our Dry Leasing business.

Net cash provided by financing activities primarily reflected proceeds from the issuance of debt in connection with the acquisitions of these aircraft. These proceeds were partially offset by payments on debt obligations and a prepayment under an accelerated share repurchase program agreement (“ASR”).

Share Repurchase Activity

Between mid-February and late April 2013, we repurchased 903,301 shares of our common stock for $36.5 million at an average cost of $40.40 per share. The shares were acquired pursuant to an ASR with an investment bank that settled on April 25, 2013.

We acquired 427,168 of these shares during the period ended March 31, 2013, which added $0.01 per diluted share to our adjusted and reported earnings for the first quarter.

Future repurchases may be made at our discretion, and the actual timing, form and amount will depend on company and market conditions.

Outlook

We expect to generate strong earnings and cash flow in 2013. Led by ACMI, each of our business segments is expected to be profitable for the year.

Incorporating our share repurchase activity, we anticipate that our adjusted fully diluted earnings per share this year will total approximately $4.80, an increase from prior guidance of approximately $4.65. Including the extraterritorial income tax benefit of $0.54 per share, our reported fully diluted earnings per share in 2013 should be approximately $5.34.

Both adjusted and reported full-year 2013 EPS guidance assume the repurchase of $50.0 million of our outstanding stock during the year.

Our expectation for full year 2013 operating performance is unchanged from the outlook we issued last quarter. We now expect to fly fewer block hours in our Commercial Charter segment in 2013 than we previously forecast. We also expect lower operating expenses as a result of continuous improvement initiatives that drive productivity improvements and operating efficiencies. These initiatives target all aspects of our business, including engine overhauls, procurement efforts, passenger catering, ground travel, and crew scheduling.

Similar to the first quarter, adjusted and reported full-year earnings in 2013 will reflect strong growth from the company’s 747-8Fs in ACMI, driven by an increase in the number of -8F aircraft in ACMI service compared with 2012, including the incremental placement with Etihad Airways we announced today.

Market growth during 2013 should be seasonal and second-half weighted. We continue to anticipate a sequential increase in our quarterly earnings throughout the year, with approximately 75% of adjusted earnings per share and 66% of reported earnings per share occurring in the second half.

Based on our revised view, block-hour volumes in 2013 are now expected to total approximately 175,000 hours. ACMI segment flying should account for about 135,000, or 77%, of expected 2013 block hours, with about 22,000, or 13%, in Commercial Charter and 18,000, or 10%, in AMC Charter. Passenger charter flying should account for more than 10,000 AMC Charter block hours in 2013.

Based on anticipated deliveries of 747-8Fs in our outstanding order, the average number of -8Fs in service in 2013 should increase to more than eight from 4.3 in 2012.

In addition, we now anticipate that maintenance expense will total approximately $172 million in 2013, about 60% of which should be incurred in the first half of the year.

Mr. Flynn concluded: “In an environment of continuing global uncertainty, we are well-positioned to serve our customers and the airfreight markets. We have performed well. We are ready to capitalize on market improvements. And we are executing a strategic plan that leverages our core competencies, provides a basis for returning capital to our investors through share repurchases, and will enable us to grow over the long term.”

In other news, Atlas Air has confirmed the placement of its eighth Boeing 747-8 Freighter into ACMI service.

The aircraft will fly on behalf of Etihad Cargo, the cargo arm of Etihad Airways, the national carrier of the United Arab Emirates, pursuant to a multi-year aircraft, crew, maintenance and insurance agreement that commences in May 2013.

The new contract between the companies follows a letter of intent announced on April 1, 2013, and complements an existing Boeing 747-400F ACMI arrangement between Atlas and Etihad. The aircraft will be operated in full Etihad Cargo livery.

Copyright Photo: Pedro Pics. Atlas Air operates this Boeing 747-87UF N850GT (msn 37570) for Panalpina Air and Ocean in their colors.

Atlas Air: AG Slide Show

Panalpina: AG Slide Show

Atlas Air takes delivery of the second new Boeing 747-800F Freighter for Panalpina

Atlas Air (New York) has taken delivery of a fifth Boeing 747-8F Freighter.

The pictured 747-87UF N851GT (msn 37565) departing from Everett (Paine Field) is the second aircraft of the type to be placed into service for Panalpina under a previously announced multi-year aircraft, crew, maintenance and insurance (ACMI) outsourcing contract.

The newest freighter will offer Panalpina, a Swiss-based global freight forwarding and logistics services provider, additional next-generation performance in payload, fuel efficiency, total cost per tonne-mile, and environmental compliance.

Atlas Air expects to receive two additional 747-8Fs in 2012 and two in the first half of 2013 for a total of nine. As previously announced, Atlas has received a commitment from Apple Bank for Savings to finance the remaining deliveries, subject to customary conditions.

The acquisition of this latest 747-8F was financed in part with proceeds from a term loan and was subsequently refinanced by the issuance of $142.7 million of 12-year, secured bonds. These bonds, which are guaranteed by the Export-Import Bank of the United States, have been priced at 1.73% and are scheduled to close on July 31, 2012. BNP Paribas and KGS Alpha Capital Markets are acting as joint lead bookrunners.

Copyright Photo: Nick Dean.

Atlas Air: 

Panalpina sells its 12% share of Luxair

Panalpina (Basel) has sold its 12.09 percent share of Luxair-Luxembourg Airlines (Luxembourg). The government of Luxembourg purchased the shares in June according to this report by Handelszeitung.

Read the full report (in German): CLICK HERE

Top Copyright Photo: Royal S. King. Swiss freight forwarder Panalpina has a close relationship with Atlas Air. Atlas Air operates this new Boeing 747-87UF N851GT for Panalpina.

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Luxair-Luxembourg Airlines: 

Bottom Copyright Photo: Bernardo Andrade. Embraer ERJ 145LU (EMB-145LU) LX-LGX (msn 145147) of Luxair arrives at Barcelona.

Atlas Air puts the first Panalpina Boeing 747-800F into revenue service flying the Luxembourg-Huntsville route

Atlas Air (New York) has put the first Boeing 747-87UF (N850GT) into revenue service for Swiss freight forwarder Panalpina (Basel/Mulhouse).

For the first time in the company’s history, an aircraft with Panalpina’s name and logo takes to the skies. Following hand-over ceremony, the 747-8F with the tail number N850GT took off from Paine Field in Everett nearby Seattle and flew to Hong Kong. In Hong Kong the aircraft named the “Spirit of Panalpina” immediately entered scheduled service within Panalpina’s unique own controlled air freight network.

From Hong Kong, the 747-8F flew to Luxembourg with the first cargo on board. It is pictured above arriving in LUX. The aircraft is being deployed on the Luxembourg-Huntsville, Alabama route as well as other routes. Panalpina launched the Luxembourg-Huntsville route, also known as the “Dixie Jet”, as the very first own controlled service in 1990. Within the own controlled air freight network Panalpina can be particularly responsive to individual requirements, also on short notice, because the freight forwarder can arrange its own capacity.

In September 2011, Panalpina and Atlas Air, signed a wet-lease agreement for two Boeing 747-8 Freighters. They are replacing two Boeing 747-400 Freighters. The delivery of the second 747-8F is foreseen for later in 2012.

The 747-8F offers 16% more capacity than the 747-400F. It is also more environmentally friendly with double digit improvements in fuel efficiency and CO2 emissions and a noise footprint reduction by 30%.

The new 747-8F adds further value to Panalpina’s own controlled air freight network. One of the aircraft’s innovative features is that two controlled temperature ranges can be maintained at the same time: One for 2 to 8 degrees Celsius (cold chain) and one for 15 to 25 degrees Celsius (controlled room temperature). Full visibility of temperature monitoring is guaranteed, from pick-up via Panalpina’s air freight hubs to final point of delivery. The secure and temperature controlled transport of products is a must within the healthcare industry.

Copyright Photo: Rainer Bexten.

Atlas Air: 

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Boeing delivers the 20th 747-8 to Atlas Air in Panalpina colors

Boeing (Chicago) today (May 31) marked the 20th delivery of its new 747-8F freighter. The airplane, a 747-87UF freighter, registered as N850GT (msn 37570), was delivered to Atlas Air Worldwide Holdings, Inc. Atlas Air (New York) will operate the freighter on behalf of Panalpina, the Swiss-based freight operator. This marks the first time in Panalpina’s history that an airplane has been painted in the company’s livery.

The 747-8 Freighter will immediately enter service when it departs Seattle for Hong Kong later today. The airplane, named the “Spirit of Panalpina”, will then fly from Hong Kong on to Luxembourg with cargo on board.

Atlas Air has ordered nine 747-8F freighters, two of which they will operate for Panalpina.

The 747-8 freighter offers 16 percent more capacity than the 747-400 Freighter. It is environmentally more progressive, with double digit improvements in fuel efficiency and CO2 emissions and a noise footprint reduction of 30 percent.

To date, Boeing has now delivered 20 747-8s including 16 747-8 Freighters, three 747-8 Intercontinentals to VIP customers and one 747-8 Intercontinental to Lufthansa.

The Panalpina Group is one of the world’s leading providers of supply chain solutions and operates a global network with some 500 branches in more than 80 countries. In a further 80 countries, it cooperates closely with partner companies. Panalpina employs approximately 15,500 people worldwide.

Copyright Photo: Boeing.

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Atlas Air: 

Atlas Air to operate two new Boeing 747-800F freighters for Panalpina

Atlas Air Worldwide Holdings, Inc. (New York) has placed two new Boeing 747-8 freighter aircraft with freight consolidator Panalpina Air and Ocean.

Under this multi-year aircraft, crew, maintenance and insurance (ACMI) outsourcing contract, Panalpina – a longtime customer of Atlas Air – will benefit from leading-edge technology. The new-production aircraft, to be operated by Atlas Air, Inc., are scheduled to be delivered in the first half of 2012 and will enter service for Panalpina upon delivery.

Panalpina is the second Atlas Air customer to enter into a long-term ACMI agreement for the new 747-8F aircraft.

The Panalpina Group is one of the world’s leading providers of supply chain solutions, combining intercontinental Air and Ocean Freight with comprehensive Value-Added Logistics Services and Supply Chain Services. Thanks to its in-depth industry know-how and customized IT systems, Panalpina provides globally integrated end-to-end solutions tailored to its customers’ supply chain management needs. The Panalpina Group operates a global network with some 500 branches in more than 80 countries. In a further 80 countries, it cooperates closely with partner companies. Panalpina employs approximately 15,000 people worldwide.

Image: Atlas Air.