SWISS freight forwarder Panalpina has managed to boost underlying profits over the past half-year despite the appreciation of the Swiss franc, after achieving 2.8 per cent growth in consolidated profit at CHF45.3 million (US$47.3 million).

The company's air freight forwarding business saw volumes decline by five per cent in the second quarter after a modest rise of one per cent in the first quarter. However lower costs delivered a sharp rise in margins in the second quarter, even if they remain below last year's levels. 

Yet, the underlying picture appears to be one where the group has been hit by diminishing demand, particularly in the oil and gas related business where it has traditionally been strong, reported UK's Transport Intelligence.

In the ocean forwarding business, gross profit shrank in Swiss franc terms. Yet the quality of earnings improved as EBIT/gross profit recovered in the second quarter to 8.3 per cent compared to a negative result in the fourth quarter of 2014. The modest sized logistics business remained in the black but gross profit continued to retract, in part due to contract rationalisation.

Judging by the dynamics of the volumes handled by the company, the business is subdued and CEO Peter Ulber appears cautious about the market outlook in general. Key to its prospects in the short-term has been the ability to control costs, not least by reducing the workforce, as well as through leveraging IT to improve productivity. This may deliver higher income in the next few quarters.