Global logistics service provider Kuehne + Nagel (K+N) announced earnings growth of 9% in the first half of 2016 to CHF356 million (US$361 million) compared to the previous year’s period, as sea freight volume expanded.
Group gross profit rose to CHF3.26 billion in the first six months of the year, an increase of 8% year-on-year, while net turnover slightly decreased to CHF8.15 billion from CHF8.22 billion. Operating result (EBITDA) grew by 10% to CHF547 million.
In sea freight, for the first time, the company reported handling over 1 million TEUs in one quarter. Container volume increased by 5.8% in the first six months compared to the previous year, well above market average, primarily on larger volumes in the export business from Asia to Europe and the U.S., said K+N. The LCL and reefer container businesses performed well. EBIT went up by 8.3% to CHF221 million.
In a challenging global airfreight environment dragged down by shrinking demand and excess capacity, the company managed to increase tonnage by 2.9% in the second quarter of the year, mainly due to the expansion of customer-specific services and industry solutions and strong export business in Asia, the Middle East, and Africa. Compared to the first six months of 2015, tonnage grew by 1.3% during the period reviewed, and EBIT improved by 8.1% to CHF147 million.
The overland business saw substantial financial growth in the second quarter of 2016, largely derived from contributions from the fully integrated U.S.-based ReTrans Group and the European business. Compared to the first six months of the previous year, EBIT increased from CHF14 million to CHF17 million.
In contract logistics, new businesses implemented accelerated in the second quarter of 2016, pushing gross profit up by 9.7% in this period versus 5.1% in the first quarter of 2016. Compared to the first six months of 2015, EBIT shot up from CHF56 million to CHF70 million.
Panalpina’s profit flat-lines
Meanwhile, Panalpina said its underlying profitability remained stable in the first half of the year, as all its businesses, except for the troubled oil and gas segment, continued to show considerable robustness against the backdrop of receding markets in air and ocean freight.
Group gross profit in the first half of 2016 totaled CHF736.3 million (US$747.2 million) from CHF736.1 million in the same period last year. Adjusted for oil- and gas-related restructuring in the second quarter, EBIT reached CHF60.8 million (reported EBIT for 1H 2016 is CHF34.7 million against CHF60.4 million in 2015). The adjusted consolidated profit amounted to CHF47.9 million (reported as CHF21.8 million in the first half of 2016 against CHF45.3 million in the same period in 2015).
Air freight volumes increased 8% in the first six months of 2016, while the market decreased by an estimated 3%. Volumes from acquired companies accounted for 6% of the growth. With higher volumes in the perishables sector but lower volumes in the oil and gas sector, the gross profit per ton decreased 4% to CHF690, resulting in a gross profit overall of CHF304.5 million. Air freight achieved an adjusted EBIT of CHF 45.7 million.
Significantly lower volumes in oil and gas and a discontinued high-volume contract meant that Panalpina’s ocean freight volumes in the first half year decreased 9% year-on-year while the market shrank by an estimated 1%. However, gross profit per TEU increased 8% to CHF323, resulting in a gross profit overall of CHF232.9 million. Adjusted EBIT in ocean freight amounted to CHF10.9 million.
The logistics gross profit stayed virtually stable with a gross profit of CHF198.9 million in the first half-year. Logistics posted an adjusted EBIT of CHF4.1 million for the first six months of 2016, compared to CHF1.5 million in the same period of last year.
“We still consider the oil and gas industry as a strategic business and are confident that we have taken the right measures in a market that is slowly stabilizing,” said the company in its outlook. “In all other industries, our business has shown good momentum and we expect this to continue throughout the year.”
