KUEHNE & NAGEL INCOME OFF SLIGHTLY, PLANS CUTS AT USCO LOGISTICS
Swiss logistics giant Kuehne & Nagel on Monday reported lower net income for the first nine months of 2002, due largely to poor utilization of warehousing in North America.
Net income was CHF108.4 million ($72.1 million), down 3.3 percent due to negatively currency impact in addition to the North American warehousing concerns. Because of the negative impact, the company has lowered its profit forecast to more than CHF150 million for the full business year.
As a result, Kuehne & Nagel said it would introduce measures at its U.S. subsidiary, USCO Logistics, including reducing warehousing capacities and cutting personnel. The company also intends to expand its customer base into other market sectors.
Kuehne & Nagel said revenue improved 3.1 percent to CHF 6.52 billion ($4.34 billion), while gross profit jumped 17.4 percent to CHF 1.44 billion ($954.9 million).
Apart from North America, all regions reported good operational results, Kuehne & Nagel said. Clear gains were made in the Europe and Asia-Pacific regions.
'Thanks to our global presence and balanced product portfolio we have been able to increase our market share and achieve a stable result in spite of the unfavorable development of the economy,' said Klaus Herms, chief executive officer of Kuehne & Nagel International AG.
Kuehne & Nagel's international forwarding business unit saw operating profit climb 20.9 percent due to increased market share, in spite of unstable freight rates and falling margins in both sea and air freight. Development of overland and rail activities also improved conditions.
Contract logistics, the company's second-largest business unit, saw the flourishing European market partially offset the poor North American warehousing utilization. Contracts with new customers should positively impact the unit for 2002 and 2003, Kuehne & Nagel said.