Geodis makes profit despite weak economy
Leading French logistics company Geodis has released further information on its first six months trading in 2003. The company once again experienced difficult conditions primarily due to the weak French market. This led to a fall in revenues from €1,636.6m to €1,587.7m. However it was able to increase its operating profits by 13% to €23m. Taking into account exceptional items and interest payments the company broke even, a result which hadn’t been achieved since 2000.
Geodis has implemented recovery plans throughout Europe to turnaround poorly performing operations. The most advanced of these are in the UK and in Spain. New plans have been introduced in Italy and Benelux where results have been highly unsatisfactory. Despite falling revenues in France, cost controls enabled the company to stabilize its position.
The company’s plans to expand its parcels operations through the acquisition of major French operator Sernam have also been shelved. Geodis originally bought 15% of the loss making state owned company in 2002 as part of the government’s plans to privatize it. However following a European Commission investigation into illegal subsidy received from Sernam’s parent, French railway SNCF, Geodis was forced to sell its stake back. There are now new plans to merge Geodis and Sernam, which has a turnover of over €500m, in 2007.
