Rising volumes boost results for Kuehne + Nagel

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Kuehne + Nagel has reported a 1.9 per cent rise in operating profit (EBITDA) to £297m (CHF 475m) in the first half while sales were up 15.9 per cent to £6.16bn (CHF 9.8bn).

Group chief executive Reinhard Lange, said: “The entire logistics industry has capitalised on the economic recovery, resulting in rising transport volumes and increased warehouse utilisation.”

Sales in the contract logistics business were up 4.7 per cent reflecting new business wins in the first half of 2010. However, the group said that owing to start-up costs the operational result decreased by eight per cent. EBITDA margin was at 4.2 per cent compared to 4.6 per cent the previous year.

In the seafreight market, demand accelerated in the second quarter, leading to shortages in shipping capacity and containers resulting in significant rate increases. “With a volume growth of approximately 20 per cent in the first six months of 2010, Kuehne + Nagel clearly outperformed the market and returned to its pre-crisis growth dynamics. The group gained market share in all trade lanes, performing particularly well in the export business to South and North America.”

However, it said that sharply increased freight rates meant that the operational result of CHF 204 million remained at previous year’s level, while the EBITDA margin declined from 5.5 to 4.7 per cent.

Kuehne + Nagel reported a growth rate of 31 per cent in airfreight. “Volumes grew in all trade lanes, especially on the routes to and from Asia-Pacific,” it said. “EBITDA margin, which had been exceptionally high in the previous year’s period, normalised in the first half year of 2010 to 5.4 per cent. Process efficiency and productivity increases led to a 7.1 per cent increase of the operational result.”

In the road & rail logistics division,  expanding activity in groupage, and less-than-truckload and full-truckload services led to a 13.3 per cent increase in net turnover. Improved network utilisation as well as process standardisation and optimisation contributed to an increase of 52.6 per cent in the operational result. “EBITDA margin improved from previous year’s 1.6 per cent to 2.1 per cent.”

Executive vice chairman Karl Gernandt, said: “In the first half of 2010 the Kuehne + Nagel Group achieved its ambitious goal of gaining market share in all business units while demonstrating strong profitability. As a result of the previous year’s investments in sales and product development, Kuehne + Nagel over-proportionally benefited from the improvement in global trade. Due to this convincing start, we are optimistic about the further development of our business. However, continued credit risks in some southern European countries and the situation in international finance markets still require great vigilance.”

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