Kuehne + Nagel International AG on Thursday posted another quarter of positive financial results as “considerable” growth in ocean and air freight volumes, as well as increased sales in its overland and contract logistics divisions, boosted revenues.
The Schindellegi, Switzerland-based global third-party logistics provider saw its net earnings for the second quarter of 2018 climb 7.9 percent to 206 million Swiss francs (U.S. $207.1 million) compared with the same three-month period a year ago, according to the company’s most recent financial statements.
Diluted earnings per share stood at CHF 1.71 for the quarter, up from CHF 1.59 per share in second quarter 2017, as revenues rose 15.2 percent year-over-year to CHF 5.2 billion.
That growth boosted first-half earnings and revenues to CHF 390 million (CHF 3.24 per share) and CHF 10.1 billion, respectively, year-over-year gains of 9.6 percent and 14.2 percent.
K + N attributed the surge in revenues to “considerable” growth across all four of the company’s primary reporting segments during the first half of the year, with air cargo tonnage soaring 18.1 percent to 863,00 tons and ocean freight volumes up 8.1 percent to nearly 2.3 million TEUs.
The air freight division saw its earnings before interest and taxes (EBIT) climb 8 percent to CHF 182 million as revenues rose 25 percent to CHF 2.7 billion, while the ocean freight segment posted an EBIT of CHF 210 million on CHF 4.3 billion in revenues, year-over-year increases of 6.1 percent and 1.7 percent, respectively.
EBIT in the company’s overland transport division jumped 48.3 percent to CHF 43 million thanks to a 17.7 percent increase in revenues, but a 12.2 percent increase in revenues in K + N’s contract logistics segment was offset by costs associated with business development and the launch of a new warehouse management system, causing EBIT to fall 10.8 percent to CHF 66 million.
K + N CEO Detlef Trefzger said the company’s industry-specific competence and digital solutions have and will continue to be key drivers in the strong first-half results, and was optimistic about the company’s prospects for the remainder of the year despite potential disruptions to global trade stemming from rising tensions in international trade policy.
“We monitor the volatile markets and geopolitical developments very closely,” he said. “Despite this market environment we are confident and ambitious as we enter the second half of the year.”
Added Jörg Wolle, chairman of the board of directors of Kuehne + Nagel International AG, “We demonstrated our performance strength yet again in the first half of 2018 and have established a solid basis for the second half of the year. Kuehne + Nagel’s agility and efficiency make us confident that the positive development of the company will continue.”
A recent article in the shipping industry news outlet The Loadstar suggested that K + N might purchase or merge with German ocean carrier Hapag-Lloyd, but this seems unlikely given the considerable risk inherent in operating an asset-based ocean carrier, many of which have struggled to turn a profit in recent years, as opposed to an asset-light 3PL that just turned in another quarter of earnings growth.