Damco said its earnings before interest and tax (EBIT) improved by 29 percent in 2011, rising from US$75 million in 2010 to $97 million, as the global logistics and freight forwarding company continued to focus on growth markets.
Productivity improvements lowered the overhead expense and drove the EBIT return on sales from 2.8 percent to 3.5 percent. Return on invested capital (ROIC) rose from 22 percent to 26 percent for the year. Total revenue grew to $2.8 billion from $2.7 billion in 2010, with reduced freight rates masking the strong increase in underlying business, said Damco, the logistics arm of Danish energy and shipping conglomerate A.P. Moller-Maersk, in a statement.
“We are pleased to have delivered such strong results, despite the softening market in the second half of the year,” said CEO Rolf Habben-Jansen.
The company said traditional annual third-quarter peaks in Europe and North America did not materialize due to weakened consumer confidence resulting from U.S. budgetary concerns and the eurozone crisis. Europe and North America posted lower results in 2011 compared to the prior year.
The ongoing focus on accelerating Damco’s expansion in growth markets led to improved results across key parts of South and Southeast Asia, Africa, and Latin America, the company said.
“More than 60 percent of our employees are in growth markets and the strength of our business in places like China, India, Vietnam, Indonesia and Africa allows us to challenge and win against even our largest competitors, which puts us in a good position when growth in Europe and the US slows,” Habben-Jansen said.
Airfreight tonnage rose 47 percent in 2011 compared to the prior year, mainly driven by the acquisition of NTS, the Chinese air freight forwarder, in August. Like-for-like airfreight volume growth was about 5 percent above market.
Damco’s ocean volume also grew by 15 percent, some 9 percent to 10 percent ahead of the general market. Supply chain management (SCM) volumes, however, declined 3 percent from last year, mainly due to reduced imports handled for Damco’s large U.S.retail customers.
