Kuehne + Nagel posts profit in difficult markets

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Integrated supply chain service provider Kuehne + Nagel said there was “considerable improvement” to its results in 2019 despite a difficult market, and announced that for 2020, it will focus on the growth of its Asia operations.

The group in a statement said its revenue grew by 1.5% to CHF21.094 billion (US$21.789 billion) in 2019 year-on-year, gross profit by 3.5% to CHF7.981 billion, and EBIT by 7.5% to CHF1.061 billion. Earnings for the year were up 3.6% at CHF800 million.

Last year, Kuehne + Nagel recorded volume and earnings growth in seafreight and overland and saw considerable improvement in results for contract logistics. However, it reported a decline in the more volatile airfreight business.

Amid a “stagnating” seafreight market, the group posted revenue growth of 4.6% at CHF7.5 billion in 2019 compared to the previous year, and gross profit was up by 3.8% at CHF1.5 billion. A total of 4.9 million standard containers (TEUs) were shipped, 171,000 TEUs more than last year (up 3.6%). EBIT increased by 9.1% to CHF456 million against the previous year.

In 2019, the drastic drop in demand for airfreight, particularly in key European industries and the perishables business, drove a decline in revenue to CHF4.7 billion. Airfreight volume fell 5.7% against the previous year to 1.6 million tonnes. Gross profit was up 9.6% at CHF1.3 billion whereas EBIT was down against the previous year at CHF329 million.

The overland trucking business had a net turnover growth of 1.7% against the previous year at CHF3.6 billion and gross profit increased by 3.0% to CHF1.1 billion. EBIT improved by 2.6% to CHF78 million.

Net turnover in contract logistics was up 2.8% in 2019 versus the previous year at CHF5.4 billion. The combination of restructuring and growth generated an EBIT of CHF198 million.

By region, the EMEA region (Europe, Middle East and Africa) contributed CHF12.8 billion (60.8% of total) of net turnover and CHF 561 million (52.9%) of group EBIT last year. The Asia Pacific region posted net turnover of CHF2.5billion (11.7%) and contributed CHF273 million (25.7%) of EBIT. The Americas region achieved net turnover of CHF5.8 billion (27.5%) and EBIT of CHF227 million (21.4%).

“In recent years, the Kuehne + Nagel Group has achieved significant success in the Asia Pacific region. Despite the current economic headwinds posed by the Coronavirus, Asia will continue to be a central driver of global economic development,” the company said.

In 2019, the company had laid the operational and financial groundwork for further, accelerated expansion of its network in Asia through both organic and inorganic growth.

“For the sixth time in a row, Kuehne + Nagel has considerably improved its results. With the current state of the global economy, that is anything but a given…. Setting aside the unknown scope of the Coronavirus, the Board of Directors is looking ahead with confidence to the 2020 business year and beyond. In the future, we will be focusing particularly on growth in Asia,” the company said.

Photo courtesy of K+N