Revenue increased by 30%, core operating profit by 20% and core net profit by 33% in 2020 compared to 2019
International freight forwarding segment recorded a high 64% increase in profit
Integrated logistics segment recorded a profit increase of 6% over 2019
China’s express giant S.F. Holding to acquire a controlling stake in KLN
Supply chain company Kerry Logistics Network Limited (KLN) said it achieved record growth in 2020 as revenue expanded 30% and core net profit rose 33% compared to 2019.
In a statement, the Hong Kong-headquartered company said revenue went up 30% to HKD53.4 billion (US$6.9 billion) in 2020, while core net profit jumped 33% to HKD1.8 billion. Core operating profit rose by 20% to HKD3.3 billion year-over-year.
William Ma, group managing director of KLN Group, said the role of logistics in 2020 became “ever more paramount” with human mobility severely curtailed and global supply chain severely disrupted by the COVID-19 pandemic.
“Even as the pandemic forced millions of corporate employees around the world to work from home, our teams have been working tirelessly on the frontline, maintaining 24/7 services across some 150 international hubs to support various industries and sustain people’s daily lives.”
As a result, he added, “KLN Group achieved record growth in both revenue and core net profit, clearly demonstrating the Group’s resilience and capability to evolve through the pandemic.”
The international freight forwarding division was the “powerhouse” of the group’s business in 2020, accounting for 28% of the total segment profit. The division’s profit for the full year 2020 increased by 64% to HKD1.0 billion year-on-year compared to a 40% growth in the first half of 2020.
The growth was mainly driven by a high global demand for pandemic-related goods as well as production and exports from mainland China.
The integrated logistics business recorded a profit of HKD2.6 billion, an increase of 6% as growth was affected by the reduced profit contributed by fewer warehouses in Hong Kong compared with 2019. Growth was mainly driven by the strong performance in Hong Kong (10% profit growth) and Taiwan (19%).
In China, the integrated logistics division bounced back in the second half of 2020, offsetting the 37% drop in profit in the first half of the year, on the back of the resumption of manufacturing activities, recovery of local consumption, and rapid growth of the e-commerce market.
Kerry Logistics also reported that in China, the 340,000-square-foot chemical logistics center in Cangzhou began operations in the first quarter of 2021. Construction of the 827,000-square-foot logistics center in Qingdao is expected to be completed in the second quarter of 2021.
The 1-million-square-foot logistics center in Guangzhou, the 305,000-square-foot chemical logistics facility in Zhangjiagang, the 644,000-square-foot hub and logistics center in Zhuhai, and the 545,000-square-foot bonded logistics center in Hainan are expected to complete construction in 2022.
On February 10, 2021, KLN announced that S.F. Holding, which owns Chinese express giant SF Express, has made a cash offer to acquire a controlling stake in KLN for US$2.3 billion. Kerry Logistics also announced plans to sell some warehouse assets and its Taiwan business to its parent company, Kerry Properties Limited.
Ma said the deal with S.F. Holding “will scale up KLN Group, extending its reach and enhancing its R&D capabilities,” as Kerry Logistics seeks to retain its competitiveness and drive changes in the global logistics arena.
Photo courtesy of Kerry Logistics