Kuehne+Nagel posts mixed bag of results in first half

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Kuehne+Nagel posts mixed bag of results in first half
Photo from Kuehne+Nagel.
  • Kuehne+Nagel reports market share gains in sea and contract logistics
  • Air logistics volumes decline
  • Swiss logistics giant to focus on yield management and balanced growth
  • Cost control efforts take hold in Q2 2023

The Kuehne+Nagel Group posted a mixed bag of results in the first half as it navigated a challenging market environment.

In a statement, the company said effects of the pandemic continued to distort year-on-year comparisons across its businesses.

Net turnover from January to June was CHF (Swiss Franc) 12.7 billion, down 38% from the same period last year.

EBIT (earnings before interest and taxes) was approximately CHF 1.1 billion, a 48% decline year-on-year. The conversion rate, which describes the ratio of EBIT to gross profit of the global transport and logistics firm, however remained at a high level of 24%, the company said.

Earnings reached CHF 860 million, down 47% from the first half of 2022.

“Kuehne+Nagel coped well with the transition from the exceptional economic situation shaped by the pandemic. In a weakened economic environment, Sea and Contract Logistics gained market share and kept earnings stable. In contrast, volumes in Air Logistics declined broadly in line with the market. While our ongoing cost control efforts became more visible in the second quarter of 2023, our strategic path is unchanged with a focus on high-quality logistics services and an extraordinary customer orientation,” said Stefan Paul, CEO of Kuehne+Nagel International AG.

“In the first half of 2023, the Kuehne+Nagel Group’s financial results were significantly greater than the comparable figures of the pre-Corona period and the Group has performed well in the new environment. In the coming years, Roadmap 2026 will remain the key driver of Kuehne+Nagel’s strategic development. The program, launched in March 2023, was very positively received both internally and externally and we are already seeing the first successes. Our focus remains on the provision of high-margin services and the development of market potential in Asia, Africa and the Middle East,” said Dr. Joerg Wolle, Chairman of the Board of Directors of Kuehne+Nagel International AG.

In the first half of the year, the net turnover of the business unit sea logistics amounted to CHF 4.9 billion, down 51% year-on-year.

EBIT of CHF 639 million was 47% off from the first half of last year. The conversion rate remained high at 49%, the company said.

Container volume handled reached 2.1 million TEUs. Kuehne+Nagel Sea Logistics gained a share in an overall market that declined by around 5%.

In the spring of 2023, Kuehne+Nagel partnered with Volvo Cars to use 5,500 tonnes of sustainable biofuels in maritime transport. Going forward, the transports for the Swedish car manufacturer will be carried out with significantly reduced fuel emissions.

Net turnover of the air logistics unit for the first half was CHF 3.5 billion, 44% less than the same period last year.

EBIT was CHF 293 million, down 65% year-on-year. The pace of declining volumes eased in the second quarter, the company said.

Air freight volume in the first half was 957,000 tonnes. The conversion rate was 31%.

In June, Kuehne+Nagel signed an agreement to acquire Morgan Cargo, a leading air logistics provider in South Africa, the United Kingdom, and Kenya. The company specializes in perishables, employs 450 logistics experts and handled 40,000 tonnes of air freight and 20,000 TEU in 2022.

The road logistics unit reported a net turnover of CHF 1.9 billion in the first half, an 8% slide from the same period last year.

EBIT of CHF 93 million was 16% less year-on-year.

Processed order volume was around 12 million, comparable to the prior year period, and network utilization was consistently high.

The Swiss logistics giant said driving the significant increase in EBIT in the first half was the ongoing implementation of RoadLOG, Kuehne+Nagel’s proprietary transport management system for road shipments.

A bright spot was the contract logistics unit, which delivered with a net turnover of CHF 2.5 billion, 3% more than the first half of 2022.

EBIT jumped 36% to CHF 110 million. The company said it gained market share in North America and in the healthcare and e-commerce sectors.

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