C.H. Robinson Worldwide reported financial results for the quarter ended June 30, 2022, with the airfreight business recording a 7.5 percent year-on-year (YoY) increase in adjusted gross profit (AGP) to $56 million.
“Air AGP increased due to a 14% increase in AGP per metric tonne shipped, partially offset by a 6 percent decline in metric tonnes shipped. Air market is stable and air cargo capacity is slowly returning,” according to the earnings presentation.
The company reported total revenues increase of 22 percent Y-o-Y to $6.8 billion, driven primarily by higher pricing across most of their services and higher truckload and ocean volume and gross profits increased 37 percent to $1 billion, primarily driven by higher adjusted gross profit per transaction across most of their services and higher truckload and ocean volume.
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“Operating expenses increased 15 percent to $561 million. Personnel expenses increased 22 percent to $444 million, primarily due to higher headcount, which increased 16 percent, and higher incentive compensation costs. Selling, general and administrative (“SG&A”) expenses of $117.2 million decreased 6.8 percent and included a $25 million gain on the sale-leaseback of our Kansas City regional center. This was partially offset by higher purchased and contracted services and increased travel expenses,” the release also reads.
“Our second quarter was another quarter of record profits, as our business model performed as we would expect it to in this part of the cycle,” said Bob Biesterfeld, president and chief executive officer of C.H. Robinson. “Our investments in our customer relationships through the early part of the cycle, while the cost of purchased transportation was rapidly increasing, are paying dividends as we retain and gain share with these customers through the terms of our agreements.
Our strong results were again driven by significant operating margin expansion in our North American Surface Transportation business, as we further improved the profitability of our truckload and less-than-truckload businesses and grew our truckload volume in a declining market. Our Global Forwarding team continued to deliver strong financial results while benefiting from the market share they’ve gained over the past couple of years.”
“As questions linger about global economic growth, inflationary pressures, and consumer discretionary spending, our global suite of multimodal services, our growing digital platform, our responsive team of logistics experts, and our resilient and flexible non-asset-based business model put us in a position to continue delivering strong financial results,” Biesterfeld stated. “While we are pleased with our performance this quarter and the fact that both NAST and Global Forwarding delivered operating margins above our publicly stated targets, we know that we have work to do to consistently deliver at our targeted level.
The work that the team is executing related to scaling our model, eliminating internal legacy processes and improving quality, while working backwards from the needs of our customers and carriers, will drive continued improvement in operating profits long-term. As we look to the second half of the year, we are watching economic conditions closely, and the management team and board continue to consider all strategies to grow operating profits and maximize long-term shareholder returns through all phases of the business cycle and various economic scenarios.” Airlines
