European road freight giant Waberer’s struggles with Covid-19 cutbacks
One of Europe’s leading full truckload (FTL) operators, Waberer’s International, has announced the introduction of “special measures to counter the adverse impact of COVID-19” and delayed the release of its 2019 annual results, originally scheduled for this week.
The measures include taking a “significant portion” of its truck fleet out of service with immediate effect, in “order to preserve the short-term financial stability of the company”. The company has around 4,300 HGVs and employs more than 8,000 staff.
The Hungary-based operator has also announced that its CEO Robert Ziegler has stepped down and resigned from Waberer’s board of directors, replaced on an interim basis by CFO Barna Erdélyi.
In a trading update issued last week, the company noted: “With the serious decline in economic activity as a result of the special measures against the spread of COVID-19 and the subsequent supply chain disruptions across the entire European continent, Waberer’s estimates that it will experience a material loss in orders.
“This may have a substantial effect on the Group’s second quarter financials. It is too early to predict how long this drop in demand will last and exactly how severe the consequences will be on Waberer’s cash flow and full year results.
Waberer’s added that it was “in a final stage of securing financing provided by its current lenders and majority shareholder. The company will implement immediate measures to counter the adverse effects of the sudden decline in demand.”
It added: “In these extraordinary times, Waberer’s is doing everything it can to continue to operate as an integral part of the European supply chain and provide its specialised transportation services to many critical sectors in Hungary and Europe.”
In addition to the significant reduction in its road fleet, other special measures implemented by Waberer’s include “a repatriation plan of the assets and the drivers outside the country (Hungary) has been adopted and its execution has started. Most discretionary spending has also been suspended.”
The company is also “rationalising its workforce to match the decline in demand. A combination of HR measures introduced involve a hiring freeze, wage renegotiation and an unpaid leave programme.”
Waberer’s underlined that the company’s labour unions were involved in drawing up the measures.
New CEO Barna Erdélyi commented: “These are unprecedented times that require unprecedented responses. I am confident that the measures introduced strike a careful balance between the necessary improvement of our financials and to maintain service level to our clients, and ensure the sustainability of the operations in the current challenging times.”
In November 2019, Waberer’s reported a net loss and decline in turnover in the third quarter of its financial year (July-September), compared with the same period in 2019. However, it said that the negative figures were largely a result of ongoing restructuring measures in its international road freight business focusing on a fleet reduction programme and which were beginning to bear fruit.
Waberer’s is majority-controlled by Luxembourg-based CEE Transport Holdco (which has a stake of almost 72%), which itself is owned by private equity player Mid Europa Partners.