Waberer’s International presented financial results for the third quarter of this year. Margins are still low because the revision of prices on the market is slower than expected. The profits of the Hungarian giant were thus significantly smaller than last year.
The Hungarian operator’s revenues in the third quarter amounted to 183 million euros, the same as in the corresponding period of 2017. However, their value in the first nine months of this year was 10 percent higher than between January and September 2017.
However, when it comes to revenues from the international transport segment, Waberer’s recorded a 3-percent fall between July and August this year. The positive impact of the increase in the prices of services was offset by the decrease in the volume of transport in the off-season months.
On the other hand, the Hungarian company grew in the regional contract logistics segment. Thanks to the growing fleet and increasing storage space, revenues in this area of activity increased by 11 percent.
Waberer’s is much worse when it comes to profits. EBITDA profit (so-called operating profit, i.e. before interest, amortization and pre-tax deduction), in the third quarter of this year, decreased by 30 percent compared to the same period of the previous year and amounted to 18 million euros. On the other hand, the EBIDTA index in the international transport segment between July and September of this year was as much as 34 percent lower than a year ago. The same indicator in the segment of regional contract logistics fell by 11 percent.
As we read in the company’s statement, these falls result from the increase in fuel prices, salary increases and the growing lack of drivers.
Waberer’s strategy is put to the test
Ferenc Lajkó, CEO of Waberer’s International, admits that „the dynamics of the market in the third quarter of 2018 had an exceptionally unfavorable impact on the company’s finances.”
Similarly to previous quarters, our two key segments were still under the influence of the two-digit growth in fuel prices in a year-on-year perspective combined with a tense situation on the labor market, which puts pressure on margins,” comments the head of Waberer’s.
Lajkó adds that the company’s strategy was to compensate for the decline in margins by raising prices, but this, unfortunately, had an adverse effect on the volume of transport in the summer months. He also points out that the transport sector has not yet adjusted the price of services to rising fuel costs and less access to drivers in the last six months.
The company has already implemented a number of initiatives counteracting unfavorable development.
We try to limit downtime. (…) Problems related to the lack of drivers are solved by recruiting drivers from new labor markets, including Serbia and Ukraine,” says Lajkó.
The company also started to reduce costs and improve operational efficiency.
Photo: Waberer’s