Scratched but not badly wounded
The crisis triggered by reactions to the outbreak of Covid-19 has also had an impact on logisticians’ figures for Q1 – albeit not a too dramatic one. Whilst a degree of optimism prevails in North America, DSV’s Danish managers are preparing cost cuts.
Over the past few weeks numerous logistics firms have published their key financial figures for the first quarter. Whilst logisticians with local activities only felt the effects of the Covid-19 downturn from March onwards, the large players were already impacted by the massive effects in China from the beginning of the year. These have had a concomitant affect on the quarterly figures, as an analysis of two European and two US providers shows.
High level of liquid funds for XPO
In the first three months of this year XPO Logistics recorded sales worth approximately USD 3.86 billion (USD 4.12 billion in 2019). Its ebitda and net profits declined significantly. XPO Logistics chairman and CEO Bradley Jacobs said that “we weren’t doing badly through to mid-March; then we were hit hard in our end markets by reactions to the outbreak of Covid-19.” Jacobs underlined the fact that his corporation is nevertheless well-positioned to overcome the crisis.
XPO Logistics, he said, has a well-functioning business model; it also has around USD 2.5 billion of liquid funds available. Its many automated warehouses and its capacities to manage growth in the e-commerce segment are amongst the key business pillars that will put it back on course, the CEO added.
The fact that the logistics provider, headquartered in Greenwich CT, is free of debt and in a financially healthy position underlines this assessment. Its logistics division, which contributes approximately 40% to its total sales, reduced those activities with low margins in Q1.
DSV seeking to make cost cuts
The recent takeover of Panalpina means that it’s hardly possible to compare DSV’s figures for the first quarter if this year with last year’s.
DSV CEO Jens Andersen informed the public that the integration of Panalpina into the logistics firm is continuing apace, adding that “of course reactions to the out- break of the Covid-19 illness had a major impact on our markets, but we nevertheless achieved a very satisfactory overall result.” DSV has estimated, however, that its ebit of DKK 1.5 billion (EUR 201 million) would have been DKK 250 million (EUR 33 million) higher without the pandemic.
The company reacted by suspending its programme to buy back shares. It also started a cost-cutting programme worth DKK 1.4 billion (EUR 187 million).
C.H. Robinson seems to have felt the impact a little less, overall, with its total revenues even rising slightly, namely by 1.4% to USD 3.8 billion. The corporation said this was down to greater truck volumes.
C.H. Robinson’s net sales, in turn, saw a 16.3% decline, and its net profits were even halved, to around USD 78.1 million.
CEO Bob Biesterfeld was nevertheless optimistic. “Our balance sheet for the period is strong, we closed the quarter with our liquidity coming in at USD 1.2 billion, so we’re very well-positioned to weather the coming global economic uncertainties.”
Every division’s results worse
Governmental reactions worldwide to the outbreak of the Sars-CoV-2 virus also left a mark on Kuehne + Nagel’s activities in Q1, of course. Its net sales sank by 6.2% to CHF 4.9 billion; its net profits fell by 23.2% to CHF 139 million. “Of course ongoing economic disruption also represents a rather immense global challenge for Kuehne + Nagel,” CEO Detlef Trefzger told the media.
Even though every unit faced falling sales returns, there were some rays of hope too. The Swiss firm managed to process many special business activities; it also maintained basic supplies in the pharmaceuticals segment, amongst many others. It doubled its e-commerce volumes; that’s a small consolation, at least, in the face of the overall result.
