Tuesday 22nd Aug 2017 - Logistics & Supply Chain

XPO increases profit forecast

XPO Logistics has increased its profits guidance for 2017 and 2018 after increasing its first half adjusted EBITDA to $660.8m from $604.2m in 2016.

First half revenue was up one per cent on 2016 at $7.3bn.

Net income in the first half of 2017 was $112.6m – up from $42.1m in 2016.

In the second quarter, the company’s logistics segment generated revenue of $1.4bn for the quarter, compared with $1.33bn for the same period in 2016 as a result of strong demand for contract logistics in both Europe and North America.

This was partially offset by a decline in managed transport revenue and unfavourable foreign exchange rates. In Europe, contract logistics growth was led by e-commerce and cold chain contracts in the UK and the Netherlands. In North America, the largest gains came from the e-commerce and industrial sectors.

Operating income for the logistics segment increased to $64.3m, compared with $51.1m a year ago. Adjusted EBITDA for the segment improved to $123.0m, compared with $106.9m a year ago.

The transport segment generated revenue of $2.41bn in the second quarter. This compares with $2.42bn for the same period in 2016, which included $133.4m of revenue from the North American truckload unit divested in October 2016.

The company raised its full year targets for adjusted EBITDA to at least $1.365bn in 2017 and at least $1.6bn in 2018.

Bradley Jacobs, chairman and chief executive, said: “The most notable growth came in last mile and contract logistics — two fast-growing parts of the supply chain where we hold leading positions in e-commerce.

“Importantly, we’re continuing to grow adjusted EBITDA faster than revenue in both transport and logistics. In North American less-than-truckload, we increased volume while improving the adjusted operating ratio to 84.6 per cent. This is the best quarterly adjusted operating ratio for our LTL business in at least two decades.”

Get Weekly Logistics & Supply Chain News
Get Weekly Logistics & Supply Chain News
Thank you for your subscription