International logistics service provider Kuehne + Nagel increased earnings by over 4.0% in the first nine months of the year compared to the same period last year, noting stable results and volume growth in all its business units despite the challenging business environment.
The organization said earnings rose 4.1% to CHF533 million (US$536 million) in January-September 2016 compared to the previous year’s period.
Gross profit likewise grew, up by 6.3% in the first nine months to CHF4.9 billion while net turnover slightly decreased. The operational result (EBITDA) improved by 5.1% to CHF817 million.
For sea freight, there was a 4.5% increase in container volumes in the third quarter, as Kuehne + Nagel again outperformed market growth of 1% to 2%. Besides material volume increases in the trans-Pacific and intra-Asian trade lanes, reefer transports in particular contributed to the favorable development.
The low rate levels in most of the trade lanes continued and the impact of the further consolidation of the shipping industry added pressure to the margins. Gross profit per TEU decreased by 4.4% in the third quarter.
Compared to the first nine months of the previous year, Kuehne + Nagel expanded its container volume by 5.4%. Gross profit rose by 4.3% and EBIT improved by 1.5% to CHF340 million.
The global airfreight market remained “tense” in the third quarter and pressure on margins continued due to shrinking demand and further capacity increases, said the company. Against this trend, its tonnage grew by 3.8% and gross profit per 100 kilos rose by 1.4%, mainly due to further scaling its industry-specific solutions.
Compared to the first nine months of the previous year, Kuehne + Nagel increased its airfreight volume by 2.2%. Gross profit rose by 6.4% and EBIT improved by 8.9% to CHF220 million.
In the overland business unit, growth momentum in turnover and gross profit from the previous quarters continued. Business developed particularly well in Europe, while it slowed in the U.S. due to the higher transport cost. Compared to the first nine months of the previous year, gross profit went up by 9.4% and EBIT improved by 5.9% to CHF18 million.
Detlef Trefzger, CEO of Kuehne + Nagel International AG, said, “Cautious consumer behaviour in parts of the EU and the USA resulted in lower export volumes in Asia. In addition, the tougher situation in the shipping industry increased pressure on sea freight margins. By maintaining our Group’s focus on industry-specific logistics solutions and high-quality services, we succeeded in achieving growth and stable results despite the demanding market environment. We are confident about the business development in the fourth quarter of 2016.”
