Kuehne + Nagel’s Q1 volumes increase but profits struggle
Global logistics group Kuehne + Nagel (K+N) has published its first quarter results of 2012, providing an interesting insight into the health of the industry.
Management commented that although the company had seen volume growth in many of the sectors in which it operates, cost pressures had resulted in lower margins, especially in the forwarding division. It had also been hit by an antitrust fine of CHF65m imposed by the European Commission.
At CHF4,834m (€4,018m/$5,253m), turnover remained stable compared to the same period of the previous year; adjusted for currency there was an increase of 5.4%. Gross profit improved by 3.0% (currency adjusted by 8.1%) to CHF1,502m (€1,248m/$1,632m). The operational result (EBITDA) declined by 12.4% to CHF218mon (€181m/$236m), and including the one-off item for the antitrust fine to CHF153m (€127m/$166m).
K+N’s results in its sea freight operation were impacted heavily by the recent hike in shipping rates on some of the major trade routes. Its EBITDA-to-gross profit margin declined from 35.9% to 30.3% and its operational result decreased by 15.2% compared to the previous year’s period. However, it managed to increase its container throughout volumes by 9%.
Its air freight operation was also able to make gains in terms of volumes; up 4% compared with last year. This was attributed to ongoing positive demand in South America, intra-Asia and the trades from Asia-Pacific to the Middle East, partly due to the acquisition of an Australian company specialising in perishables logistics. However, investments resulted in a decline of the EBITDA-to-gross profit margin from 32.3% to 26.5%. EBITDA fell to CHF54m (€44m/$59m), 14.3% below the previous year. Due to the inclusion of the one-off item for the antitrust fine a loss of CHF11m was recorded.
K+N’s Road and Rail Logistics division experienced increased freight volumes in groupage and full and part loads, despite what management called the difficult economic situation in Southern Europe. RH Freight Group, acquired in 2011, considerably contributed to the overall improvement of net turnover by 18% in local currencies. EBITDA increased by 7.7% and, at 1.9%, the EBITDA margin remained stable at the previous year’s level.
However, the contract logistics business saw divergent regional developments in the first quarter of 2012. Strong demand in Central Europe, Asia and South America resulted in an increase in net turnover by 6% (currency adjusted). In contrast, high margin pressure and volume declines especially in France and Southern Europe led to a decrease of the business unit’s operational result by 19.5%. EBITDA margin was at 3.1% compared with the previous year of 3.9%.
The positive gain in forwarding volumes is also a strong indication of an improving economy. However focusing on the company, Q1 results have suffered as a result of the antitrust fine imposed by the European Commission, increased shipping rates and high margin pressure; particularly in its Contract Logistics business.
Quelle: eyefortransport
Portal: www.logistik-express.com