[090321.EN.BIZ] K+N Ends 2020 On Strong Note, Minimising Revenue Impact

 

MAJOR Swiss-based forwarder Kuehne + Nagel (K+N) has reported that revenue in 2020 fell 3.4 per cent year over year at US$22 billion.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) was up 5 per cent to $2 billion, while net profit of $859 was down 1.4 per cent.

The severely disrupted container shipping markets played a leading role in driving sea freight through the company's high-yielding air cargo networks in 2020, helping to soften the revenue impact of declining volume across both its transport sectors.

"High rates, very constrained ports, and low capacity of containers forced some of our customers out of the sea freight business," Detlef Trefzger, CEO K+N, said during a recent 2020 earnings call. "They made ad hoc decisions to ensure goods arrived on time at destination, and that led to higher yields and higher volume [in air freight]."

But in a volatile year heavily distorted by the Covid-19 pandemic, it was the fourth-quarter performance that stood out. Revenue increased 5.5 per cent compared with the same quarter in 2019, EBITDA was up almost 7 per cent, and net profit increased 6 per cent.

Air and ocean freight reported volume declines for both the full year and fourth quarter year over year, but the two business segments saw their financial performance improve significantly in the last three months of 2020.

K+N's full-year ocean volume was down 6.8 per cent at 4.5 million TEU, while the fourth-quarter volume was down 4.2 per cent. Ocean revenue was down 5 per cent for the year at $7.7 billion, but fourth-quarter revenue increased almost 6 per cent year over year to $2.1 billion. While operating profit for sea freight fell 7.2 per cent for the full year, it was up 20 per cent in the fourth quarter compared with the same period in 2019.

In air freight, higher rates driven by strong demand and limited capacity served to boost revenue for both the full year and fourth quarter, despite volume losses.

Full-year air cargo volume was down 12.8 per cent at 1.4 million tonnes, and fourth-quarter volume fell 7.5 per cent. But 2020 revenue shot up 11.6 per cent to $5.6 billion, with fourth-quarter revenue alone up almost 30 per cent year over year to $1.6 billion. Operating profit of the air freight segment increased 134 per cent in the fourth quarter, reports IHS Media.

Source : HKSG.