Damco reports Q1 cargo surge
Challenging market conditions didn’t impair Damco’s performance in the first quarter of 2012, with the logistics provider reporting a 37 percent, year-over-year, surge in airfreight volumes. This increase helped the integrator improve its gross profit by 8 percent, year-over-year, in the first quarter, and see net revenues of $738 million, up from $53 million in the first quarter of 2011.
According to a press release, “this result shows that Damco’s commercial strategy of increased focus on large and medium-sized customers in selected industry verticals and enhanced local field sales is delivering the performance expected.”
Damco’s first-quarter success — particularly in the airfreight sector — also reflects its August 2011 acquisition of Chinese freight forwarder NTS and accrual of new customer contracts, according to the press release. The logistics provider’s 6 percent, year-over-year, increase in seafreight traffic contributed to the revenue surge, as well.
Damco CEO Rolf Habben-Jansen spoke out about these numbers, praising the company for maintaining profitability despite a sour market. “I am pleased to see that we are making good progress under difficult conditions,” he said in a statement. “Our growth bears testament to the resonance our supply-chain services are finding with customers.”
Even so, Damco’s supply-chain management volumes remained flat in the first quarter of 2012. Company officials expect this trend to reverse in the second quarter, however, as new customer contracts go into effect.
EBIT also lagged in the first quarter, with Damco reporting a 19 percent, year-over-year, loss in this category. Although trading was on par with last year’s numbers, Damco’s first-quarter statistics were marred by the costs associated with the recent restructuring of its European activities.
Habben-Jansen defended such actions, stating that “we will absorb additional cost in the first two quarters because of the restructuring of our European region into east and west.
“This is the right thing to do to position us for the years to come,” he continued. “When the changes are all implemented at the end of [the second quarter], Damco will be in a stronger position to address the very different needs of these diverse markets.”