Freight forwarding decline due mainly to lower cross-border flows and time-critical services coming from core client Peugeot Citroën.
Gefco, the automotive logistics specialist, posted growth in both sales and profitability in the first six months of the year despite a “poor performance” in its Air & Sea freight forwarding segment.
Global revenue for the six months to 30 June reached €2,480.4 million, an increase of 4.2% on a like-for-like basis when compared to the same period last year, notably driven by strong results in Finished Vehicle Logistics and by the momentum of Market Clients’ sales (customers excluding traditional core customer Peugeot-Citroën and its unit Opel-Vauxhall), the French firm said.
Market Clients sales were up 11.2% and this contributed to Further significant improvement in profitability with recurring EBIT (operating profit) increasing by 23.6% compared to H1 2018, to €117.3 million.
Highlights in the first half of 2019 also included “the successful integration and strong performance” of the Bergé-Gefco joint venture started in January 2019 and the acquisition of Chronotruck – a company that connects shippers and carriers through an innovative platform – strengthening Gefco’s digital service offering.
However, revenue from Gefco’s Air & Sea segment decreased by 24.8% to €164.9 million, mainly due to lower cross-border flows and time-critical services coming from Groupe PSA, especially to and from regions such as Latin America and Asia.
Nevertheless, Gefco underlined that the segment demonstrated its unique know-how” within its Industrial Project Cargo offering by supporting a new large construction project in Turkmenistan, as well as a renewable energy field in Chigirin (Ukraine) with Scatec Solar.
The Air & Sea segment also renewed several contracts for pharmaceutical customers in Germany and The Netherlands.
Luc Nadal, chairman of Gefco’s Management Board, commented: “We can be proud of the positive financial results achieved in H1 2019. We maintain our leadership position in European automotive logistics and clearly benefit from our global and multimodal capabilities. Our main customer, Groupe PSA, performed relatively well in H1, especially in Europe. Market Clients sales continue to grow, especially in Finished Vehicles Logistics, off-setting a poor performance in our Air & Sea segment.”
He added: “Our recent acquisition of Chronotruck – a digital load-matching platform that connects shippers and road freight carriers and provides other digital services – is an important milestone in our digitalization strategy and I am looking forward to new opportunities to serve our customers with agile, innovative and digital solutions.
“Finally, I am pleased to say that we are on track to execute our long-term strategy despite current lower volumes and the broader structural changes foreseen in the sector globally.”
For his part, Gefco’s executive vice-president, Finance & Strategy, Pavel Ilichev, said: “I am very satisfied with the financial performance GEFCO achieved over these first six months, in line with our expectations. The various improvement initiatives that we have implemented continue to pay off, driving our recurring EBIT margins up vs. last year. The sound financial position of the group also allows us to invest in strategic projects through our own cash and existing financing, with enough flexibility to finance our future growth ambitions.”
Gefco is currently majority-owned by Russian rail group, RZD.
Source: Lloyd’s
