Profits slip at K+N

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Kuehne + Nagel has reported a fall in its half-year profits, but group chief executive Reinhard Lange (above) has referred to the results as “satisfactory”.

Sales across the group dropped by some 20 per cent in the first half of 2009, and gross profit fell by 6.7 per cent. Operating profit (EBITDA) was down 12.1 per cent, and net earnings were down 16.2 per cent to CHF 258 million (£146 million).

The 3PL giant said that in the second quarter the global market for contract logistics stabilised at the first-quarter level, but was hit by a “considerable” volume fall compared to the previous year, which Kuehne + Nagel compensated for with new business.

Sales were down 9.1 per cent in Contract Logistics, while EBITDA fell by 23.7 per cent. EBITDA margin fell from 5.5 ( in previous year) to 4.6 per cent.

The group’s road and rail logistics division was hit by a 17.3 per cent drop in sales. However, gross profit increased by 32.8 per cent as a result of acquisitions. EBITDA margin remained similar to the previous year at 1.6 per cent.

Volumes in the seafreight business increased by ten per cent from the first to the second quarter of 2009, although volumes fell by 11 per cent compared to the first half of 2008.

EBITDA dropped 3.3 per cent, and EBITDA margin increased from 4.3 to 5.5 per cent.

Volumes were up ten per cent in airfreight from the first to the second quarter of 2009, despite the 20 per cent drop in cargo volumes in the global airfreight market.

EBITDA fell by 16.2 per cent, but EBITDA margin rose from 6.1 to 7.4 per cent.

The company reckons that strict cost management and increased sales activity has helped stabilise profits.

Reinhard Lange said: “Considering the extremely difficult global economic environment, the development of our business and results during the first half of 2009 was satisfactory.

“We expanded market share throughout the business units, while our value-creating services and global cost management contributed to margin improvements.

“We see this as a confirmation of the resiliency of our business model.”

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