Kuehne + Nagel Group reported an overall decline in net turnover and EBIT in the first half and second quarter of 2020 as all divisions—except air cargo which posted gains—were affected by the pandemic.
In a statement, Kuehne + Nagel said net turnover for the first half-year was CHF9.8 billion and EBIT was CHF419 million, down 7.5% and 5.3%, respectively. In the second quarter, net turnover was CHF4.9 billion and EBIT was CHF235 million, a contraction of 8.7% and 12.6% from the same period last year.
In sea logistics, the company said the first six months of the year was marked by reduced shipping volumes and a decline in business.
“Kuehne + Nagel was able to gain market share in select, high-yielding industries including pharma, reefer transport and e-commerce,” it said, but this failed to fully compensate the significant decline in the high-yielding SME customer portfolio.
In the second quarter of 2020, container volume declined by 11.7% year-on-year to 1.1 million TEUs. Sea logistics net turnover fell to almost CHF1.7 billion, down 11.9%, and EBIT to CHF88 million, falling 28.5%.
In the first half, net turnover for sea logistics was CHF3.4 billion, down 9.4% from the first half of 2019, and EBIT reached CHF167 million, a dip of 28.9%.
Meanwhile, air logistics net turnover and EBIT were higher in the first half and second quarter compared to a year ago.
Net turnover in the second quarter of 2020 rose to CHF1.4 billion (+15.0%) and EBIT to CHF110 million (+17.0%). This even though at 315,000 tonnes, air freight volume in the second quarter of 2020 was 22.0% below the same period of the previous year.
Net turnover in the first half was up 4.2% to CHF2.5 billion and EBIT grew 4% to CHF181 million year-on-year.
A high demand for crisis goods in the second quarter 2020 led to a short-term, beneficial shift in the product mix, said the logistics company.
Furthermore, the air logistics business unit purchased charter capacity for its customers on a targeted basis as belly capacity on passenger flights was not available during the second quarter of 2020.
“These factors, combined with active cost management, produced attractive profitability along with expanded market share. With the gradual resumption of passenger services since June, a slight normalisation of the general market conditions is visible,” said the release.
For road logistics, April and May 2020 were characterized by a significant decline in order volume. However, demand noticeably revived since June. The business unit’s net turnover declined to CHF721 million in the second quarter of 2020 and EBIT was down to CHF9 million.
In contract logistics, net turnover declined to CHF1.1 billion and EBIT to CHF28 million in the second quarter of 2020. The significant reduction in demand for the period was mitigated by stringent cost management. Essential goods and e-commerce, which now account for around half of the contract logistics portfolio, recorded significantly higher demand.
Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG, said: “We expect the second half of the year to continue to be marked by major uncertainties, for which Kuehne + Nagel is well prepared thanks to its agile structure, rigorous cost management and high-quality service offerings.”
Photo courtesy of Kuehne + Nagel
