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The Kuehne+Nagel Group reported lower earnings in the first quarter of 2024 impacted by negative exchange rate effects
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Gross profit sank 13% to CHF2.076 billion from CHF2.394 billion year-on-year
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EBITDA dropped 28% to CHF576 million
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The group said the focus on efficiency and streamlined structures allowed it to reduce costs per unit by 12% in sea logistics and 14% in air logistics
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It handled 1 million TEUs of sea freight, 491,000 tons of air freight, and processed about 5.6 million orders for land logistics
The Kuehne+Nagel Group reported lower earnings in the first quarter of 2024, with EBITDA (earnings before interest, taxes, depreciation, and amortization) down 28% to CHF576 million from CHF803 million year-on-year due to negative exchange rate effects of 3% relative to the prior year.
“In a challenging environment, Kuehne+Nagel started the business year 2024 with solid but lower year-over-year results. Our focus on efficiency and streamlined structures allowed us to reduce costs per unit by 12% in Sea Logistics and 14% in Air Logistics. By discontinuing the regional structure, we have laid the foundations for further growth and enabled more direct access to our customers worldwide. Additionally, we have strengthened our offering for our South East Asia customers through our strategic acquisition of City Zone Express, a Penang, Malaysia-based Road Logistics service provider,” Kuehne+Nagel International AG chief executive officer Stefan Paul said in a statement.
Gross profit sank 13% to CHF2.076 billion from CHF2.394 billion.
EBIT amounted to CHF376 million from CHF612, down 39%.
Net turnover reached CHF5.5 billion, an 18% decline from CHF6.748 billion.
The conversion rate, which describes the ratio of EBIT to gross profit for the group, stood at 18% in the first quarter of 2024, significantly higher than the pre-COVID-19 value of 12% in the first quarter of 2019. Overall, K+N said its figures are above the corresponding pre-pandemic levels.
The net turnover of the group’s sea logistics business in the first quarter of 2024 amounted to CHF1.9 billion, 28% down from the CHF2.667 billion in the same quarter last year. EBIT declined 43% to CHF197 million.
The sea freight volume handled by the group reached 1 million twenty-foot equivalent units (TEU), 1.5% higher year-on-year.
The group’s supply chain visibility platform Seaexplorer was expanded to include schedules for less-than-container-load (LCL) shipments. In the context of the Red Sea crisis, K+N said customers were able to optimize their transport planning using real-time information provided by Seaexplorer.
The air logistics segment also reported a decline in net turnover for the first quarter of the year, generating CHF1.6 billion, 15% lower than the CHF1.862 billion in the first quarter of 2023.
EBIT dropped 39% to CHF94 million.
The air freight volume handled reached 491,000 tons in the first quarter, up 3.4% from the previous year.
Last February, a new temperature-controlled area was added to the group’s air logistics gateway at New York’s JFK Airport, covering a total storage space of 7,200 square meters. K+N said this location plays a crucial role in further developing healthcare logistics in the United States.
For road logistics, EBIT declined 42% to CHF30 million on a net turnover of CHF860 million, down 10% from CHF 956 million year-on-year. During the first quarter, K+N processed approximately 5.6 million orders.
In March 2024, K+N announced the acquisition of the South East Asian Road Logistics service provider City Zone Express. The company has more than 500 employees and will significantly expand K+N’s offerings in cross-border transportation in Asia.
Finally, the net turnover of the contract logistics business in the first quarter of 2024 fell 10% to CHF1.1 billion from CHF1.263 billion in the first quarter of 2023. EBIT was down 11% to CHF55 million.
K+N inaugurated a new US contract logistics facility in Piscataway, New Jersey during the first quarter. Covering an area of approximately 10,000 sqm, this distribution center serves the fashion and luxury industry and is equipped with state-of-the-art automation and robotics.
READ: Kuehne+Nagel navigates challenging environment in first three quarters
