Panalpina profit falls, sets provision for U.S. probe

* Charges to hit H1 results

* Posts Q1 consolidated profit of 37,000 Sfr, above f’cast

* Company says outlook for 2010 hard to predict
* Shares rise 7 pct

By Catherine Bosley

ZURICH, April 29 (BestGrowthStock) – Swiss logistics group Panalpina
(PWTN.S: ) said it would set aside 120 million Swiss francs
($110.6 million) to cover possible fines in U.S. legal probes
after posting less-than-expected fall in first-quarter net

Logistics companies spent much of last year seeing demand
crumble as retailers stopped ordering new stocks and
manufacturers curbed production of goods.

Panalpina said net profit in the first quarter fell 98
percent year on year to 37,000 Swiss francs ($34,100), beating
analysts’ expectations in a Reuters poll for a net loss of 13

Although first-quarter sea freight volumes had outpaced
market growth and air freight rose in line with it, Panalpina,
which competes with Kuehne & Nagel (KNIN.VX: ) and Deutsche Bahn’s
Schenker, said volumes overall remained below pre-crisis levels.

“While we are glad to see volumes on the rise in the first
quarter, the remainder of 2010 is hard to predict,” Chief
Executive Monika Ribar said in a statement.

“We expect Asia to be the major growth driver in the coming
months as consumption in Europe will most likely take more time
to recover.”

Shares in the company were up 7 percent at 0732 GMT,
compared to a 0.6 percent fall in rival Kuehne & Nagel.

Panalpina, which is under scrutiny by the U.S. Department of
Justice and the Securities Exchange Commission, said the 120
million franc provision would hit its first-half results and
that a settlement with U.S. authorities was expected in the near

In December, Panalpina said it was close to reaching a
settlement with the U.S. Department of Justice regarding a probe
into its activities in western Africa. [ID:nGEE5B803N]

“The provision of 120 million Swiss francs is likely going
to be a relief for the market and removes uncertainty,” Kepler
analyst Roger Steiner said in a note.

The company said the provision did not cover a European
Commission cartel investigation into a number of freight
forwarders. [ID:nSGE61A0M0]

The group said it expected any impact from travel
disruptions due to the Icelandic volcano to be minimal.

Larger rival Kuehne & Nagel’s first-quarter results,
released on April 19, beat analysts’ expectations and it raised
its targets for sea and air freight, saying it expected to
benefit from a pick-up in global trade. [ID:nLDE63F0PF]

Panalpina trades at 21 times December 2011 earnings, a
premium to Kuehne at 20 times.

Investing Research

($1=1.085 Swiss Franc)
(Editing by Karen Foster)

Panalpina profit falls, sets provision for U.S. probe