Kuehne + Nagel earnings increase
Kuehne + Nagel International AG reported third quarter net income of 145 million Swiss Francs ($195 million), up 1 percent from the same 2007 period.
Invoiced turnover, which includes customs duties and taxes was 5.6 billion Swiss Francs ($7.5 billion), up 4 percent for the same periods.
The company noted that for the first nine months of the year, profit is up 10 percent to 455 million Swiss francs ($611 million) and invoiced turnover is up 6 percent to 16.3 billion Swiss francs ($21.9 billion).
The company commented on various segments of its business as follows:
' Ocean: “As a result of the weakening global economy, growth rates in sea freight slowed down. The global container market grew year-to-date by just 4 percent. This development affected Kuehne + Nagel’s growth rates as well,” the company said, adding it had “increased its container volume by almost 6 percent in comparison with the previous year. Especially in the trades Far East to North and South America, Kuehne + Nagel was able to outgrow the market. The strongest performance was recorded in the intra-Asian traffic and, as a result of the weakened dollar, in the U.S. export business. The operational result increased by 9.4 percent due to Kuehne + Nagel’s capability of adding value to customers’ supply chains by offering IT-based solutions”
' Air: “The growth of the global air freight market, heavily affected by the economic downturn, declined to about 2 percent. Kuehne + Nagel raised tonnages by about 8 percent. In particular, the Middle East and South America regions performed very well. In addition, the demand for Kuehne + Nagel’s niche products grew significantly. Productivity increases and strict cost management led to an improvement of the operational result by 15.8 percent.”
' Overland: The company said expansion of its European activities remains a strategic focus. It said net turnover was up 13 percent, thus meeting the goal to steadily increase shipment volumes. Gross profit margin increased from 18.1 percent to 20.4 percent.
' Contract logistics. Business was negatively affected by the weakening economy especially in the United States and United Kingdom. This, however, was compensated by new business wins. Net turnover increased by 5.9 percent (10.7 percent excluding currency impact and acquisitions). Despite pressure on margins in the third quarter, the operational result was 4 percent higher than in the previous year.
The company noted that in March it entered into a sale and leaseback agreement for 20 warehouse locations with the Goodman European Logistics Fund and that the majority of the transaction was completed in the third quarter, but said the resulting transaction value did not impact the development of the results in the period under review.
Klaus Herms, chief executive officer of Kuehne + Nagel International AG, said “it is rather difficult to forecast how the markets will develop.
“The financial crisis and unfavorable economic developments have their impact on the logistics industry as well,” he said. “In the past nine months, we nevertheless succeeded in keeping our results stable. More than ever, it is of high importance to add value to the customers’ supply chains and to be able to quickly adapt to change.” ' Chris Dupin