UTi Worldwide reported a fiscal fourth-quarter drop in revenue of 4.7 percent to $1.09 billion and a decline in net revenues, year over year, of 8.7 percent.
Revenues for the fiscal year dropped, year over year, from $4.91 billion to $4.61 billion.
Responding to these results, the company is taking steps to improve growth by making changes to sales infrastructure, among other actions, said Chief Executive Officer Eric W. Kirchner. He blamed the lackluster numbers on a challenging pricing environment for freight forwarding and a sluggish air freight market. Competition is adding another challenge on top of the weak economy.
“In contract logistics and distribution, we experienced reduced activity at existing locations and made investments to prepare for newly won business,” he said in a statement. “While we secured new business in both segments in the fourth quarter, declines in net revenue from existing accounts more than offset these wins. Clearly these results are not satisfactory.”
Kirchner expects to hit savings of $30 million to $35 million in the next fiscal year from the company’s transformation activities. The number could reach $50 million in fiscal-yeasr 2015. UTi will roll out its new forwarding operating system in 35 more countries during the next fiscal year.
Air freight forwarding revenues declined by more than $20 million in the fourth quarter, compared to the previous fiscal year, and revenues dropped from $1.73 billion to $1.44 billion during the 2013 fiscal year. During the same time, ocean forwarding rose from $1.23 billion to $1.27 billion. - Jon Ross