The Hong Kong-based third-party logistics provider increased earnings in 2016, and looking ahead, expects to complete the acquisition of a controlling stake in a Dubai-based freight forwarding group in May.
Kerry Logistics recorded a core net profit of HK$1.1 billion (U.S. $142 million) for 2016, a 4 percent increase from 2015.
Kerry Logistics Group Managing Director William MA attributed the sustainable increase in earnings to strong growth in the International Freight Forwarding (IFF) business segment, solid growth in South and Southeast Asia, and synergies generated from recent acquisitions.
The Hong Kong-based third-party logistics provider’s turnover surged 14 percent year-over-year to HK$24 billion.
The Integrated Logistics (IL) business segment saw profits tick up 1 percent from 2015 to HK$1.7 billion.
However, The IFF business segment saw profits surge 24 percent from 2015 to HK$448 million, mainly fueled by contributions from San Francisco-based Apex Maritime in the U.S. and robust growth in Asia.
In June 2016, Kerry Logistics completed its U.S. acquisition of a majority stake in Apex and its affiliated companies; and in December 2016, the company agreed to purchase the freight forwarding business of Spanish customs broker and forwarder Bofill & Arnan.
In regards to further acquisitions, Kerry Logistics said an acquisition is underway to establish the group’s presence in the Commonwealth of Independent States (CIS) countries. In 2016, Kerry Logistics entered into definitive agreements to acquire a controlling stake of a Dubai-based freight forwarding group that is engaged in rail, road and airfreight businesses in nine CIS countries. The acquisition is scheduled for completion by May 2017.
Meanwhile, last Friday, Kerry Logistics entered into a definitive agreement to divest its entire 15 percent interest in Asia Airfreight Terminal Company Limited.
However, Kerry Logistics has been rapidly expanding its portfolio of facilities. During the fourth quarter of 2016, the company’s new 277,000-square-foot logistics center in Xi’an, China commenced operations; and in January 2017, the construction of its new 213,000-square-foot Kerry Worldbridge Logistics Center in the Free Trade Zone of Phnom Penh, Cambodia was completed.
Future facility portfolio expansions include:
• A new facility in Shanghai, China, which is expected to be completed in the second quarter of 2017;
• A new facility in Wuxi, China, which is expected to be completed in the third quarter of 2017;
• Two other facilities in Wuhan, China and Changsha, China with an estimated aggregate GFA of 0.9 million square feet, which are currently in the planning process;
• And construction on a multifunctional logistics center in Guanyin, Taiwan, which will span over 400,000 square feet and consolidate various sorting hubs in the region, is expected to start in September 2017 and have a target completion for 2019.
Kerry Logistics records growth in 2016
