Kuehne + Nagel lifts profits despite market challenges
Global freight forwarder Kuehne + Nagel (K+N) this week reported a substantial increase in earnings for the first nine months of 2015, in the face of global lacklustre cargo volumes and heightened exchange rate volatility.
The Swiss-based group's gross profit dropped by 1.9% to $4.794 million due to currency impacts, but its operating profit improved by more than 5%.
Additionally, the group's ocean freight business contributed 12% higher operating profits, compared with the fiirst nine months of 2014.
In a statement on the company's website, Dr. Detlef Trefzger, CEO, Kuehne + Nagel International AG, said: “In the third quarter we further improved our results, especially in seafreight and airfreight.
"The development in overland is solid and the optimisation of selective projects in contract logistics is proceeding as planned. Our strong focus on innovative logistics services and strict cost management enabled growth in profits in a demanding market environment.
"The performance in the first nine months confirms our market strategy and we see our Group on the right track.”
In the first nine months of the year Kuehne + Nagel exploited growth opportunities in the US import business from Europe and Asia which compensated for the continuous market weakness in exports from Asia to Europe.
Profitability improved substantially in this business unit: Gross profit per TEU increased by 4.4% and the EBIT-to-gross profit margin (conversion rate) improved from 30.2% to 32.7%.
In comparison to the previous year’s period EBIT increased by 11.7%.
In a stagnating airfreight market, Kuehne + Nagel grew volumes by 5.1% in the first nine months of 2015. The increasing demand for specialised services in the industry segments automotive, pharma, aerospace and perishables contributed to this favourable development as did the good performance in Asia, Europe and North America.
In comparison to the previous year the conversion rate rose from 27.5% to 30%t. EBIT increased by 11%.
The overland business reported a stable result. During the first nine months net turnover declined by 12.1% due to the discontinuation of project business and lower rates as a result of lower diesel prices.
The acquisition of ReTrans, a US-based provider of multimodal transportation management solutions, consolidated since August 2015, will strengthen Kuehne + Nagel’s market position as an integrated logistics provider in North America.
The capability to offer scalable end-to-end solutions in industries including automotive, high-tech, pharma and consumer goods led to numerous new contracts during the first nine months of 2015.
However, the restructuring of selective projects in the United Kingdom and currency effects continued to impact the result negatively. EBIT decreased by CHF 21 million ($80.68M) to CHF 86 million ($38.04m) compared with the previous year’s period.