[300712.EN.LOG] Kuehne + Nagel First Half Net Profit Declines 11.1pc To US$285.5 Million

SWISS forwarding giant Kuehne + Nagel has announced that first half 2012 net profit, excluding an antitrust fine it paid in the first quarter, came to CHF279 million (US$285.57 million), down 11.1 per cent year on year. Including the antitrust fine, the result was CHF214 million (US$218.87 million).

First half revenue increased by 2.8 per cent to CHF10.06 billion. Gross profit improved by 2.6 per cent to CHF3.03 billion. The operational result (EBITDA) declined by 9.6 per cent to CHF454 million.

"In the first half of 2012, muted consumption in all parts of the world and increased market volatility influenced the global logistics business," said CEO Reinhard Lange, commenting on the results.

"Softened demand affected in particular the trades from Asia to Europe and North America and slowed down volume development in sea freight and air freight. Nevertheless, we achieved above market volume growth in both segments. Our industry-specific logistics solutions positively contributed to this development," he said in a company press release.

In the sea freight division volumes increased by 8 per cent, lead by the export business from Asia to the Middle East, South America and Africa, and the company also achieved also increases in the transpacific trade lanes. In the Asia-Europe trades, volumes stagnated on the back of weak market demand. It said that several rate increases by shipping lines in short intervals led to margin pressure, with the operational result declining by 10.9 per cent.

The air freight division suffered a 4 per cent decrease in market volumes compared to a year earlier. The company said it continued to focus on the expansion of its activities in special segments - most notably perishables logistics - and to provide industry-specific air freight solutions resulting in a tonnage increase of about 1 per cent year on year. The operational result declined by 10.9 per cent year on year.

As for road and rail logistics, currency adjusted, net turnover increased by 9.8 per cent; and the operational result improved by 7.4 per cent compared to the first half of 2011.

In contract logistics net turnover adjusted for currency effects increased by 6.9 per cent due to solid demand in North Europe, Asia and South America. In North America strict cost management resulted in profitability improvements. However, margin pressure, start-up costs and the closure of unprofitable locations in France and other countries in Southern Europe negatively impacted the result of the business unit in the first half of 2012. The operational result was described as being "unsatisfactory" after decreasing by 15.3 per cent.

Looking ahead, Karl Gernandt, chairman of Kuehne + Nagel International AG, said that the implemented cost reduction programme is having a positive effect and the group "is getting back on track to achieve the profitability and productivity goals set for the full year 2012".

Source : HKSG.