Third-party logistics provider Kuehne + Nagel Group reported higher profits in the first half of the year despite a decline in revenues compared to the same period in 2014.
The Kuehne + Nagel Group increased profits nearly 4 percent to 326 million Swiss francs (U.S. $342.25 million) in the first half of 2015, compared with 313 million Swiss francs in the first half of 2014, according to the company’s most recent financial statements.
The Swiss third party logistics provider saw overall revenues fall 3.24 percent to 8.23 billion Swiss francs during the first half of the year due, in part, to a negative currency impact of 7.3 percent.
K + N’s ocean freight division saw container volumes drop 1.8 percent in the first half of 2015 “due to the concentration on higher margin business and the continuous weakness of market volumes in the Asia-Europe trade lanes,” the company said. Gross profit per TEU for the unit, however, was up 4.4 percent earnings before interest and taxes (EBIT) increased by 8.5 percent compared to the same period a year ago.
In its airfreight sector, K + N reported 11.5 percent EBIT growth compared to the previous year thanks to a 5.2 percent increase in tonnage. The company attributed the performance to strong growth in exports from Europe, North America and Asia.
EBIT dropped only slightly in K + N’s overland business unit, from 16 million Swiss francs to 14 million Swiss francs in the first half of 2015, despite revenues declining 16.6 percent. The company expects its recent acquisition of U.S.-based multimodal transportation management provider ReTrans to expand both the business base and the product portfolio of its overland unit going forward. Financial terms of the deal were not disclosed, but the transportation and logistics group of investment bank Stifel estimated the transaction to be valued at $180 million to $200 million.
Results in the company’s contract logistics unit were negatively affected by “volume reductions in existing business with customers in Western Europe and the restructuring of customer businesses in the United Kingdom,” as well as a strong Swiss franc. The segment’s EBIT fell 5 percent to 56 million Swiss francs compared to the same period in 2014.
“Given the demanding market environment and currency volatilities, we are very pleased about the development of our results in the first half of 2015,” Kuehne + Nagel International AG Detlef Trefzger said of the results. “The solid performance in seafreight and the increased profitability in airfreight are to be highlighted. Due to our proven business model and the consistent implementation of our global strategy, we were able to increase the earnings for the period despite the stronger Swiss Franc.”
“In the first half of 2015 the increased profitability confirmed the strength of the Kuehne + Nagel Group and the diversified service portfolio supported growth, especially in airfreight,” added Karl Gernandt, chairman of the board of directors. “Therefore we are confident regarding the further development, although the macroeconomic environment deserves close attention.”
K + N profits grow in first half 2015
