Strong third quarter for Kuehne + Nagel

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Profits rose for Kuehne + Nagel in the third quarter as a result volume increases in seafreight and airfreight and intensified cost management.

Sales were up 12.4 per cent on the third quarter of last year while gross profit rose by 6.9 per cent. EBITDA improved by 3.1 per cent.

But, while sales were up six per cent to CHF 15.5bn (£10.3bn) for the first nine months, EBITDA was down 5.6 per cent to CHF 687m (£458m).

In contract logistics, results stabilised in the third quarter owing to the closure of non-profitable locations and concentration on profitable growth with the expansion of activities for multinational customers.

Net turnover increased by 3.8 per cent in the first nine months of 2012, and both, the operational result at CHF 115m (£77m) and the EBITDA margin at 3.6 per cent remained stable at previous year’s level.

Container volumes were up by seven per cent for the first nine months. However, it warned that in the third quarter, market growth has slowed down substantially in most trade lanes.

“In the Asia-Europe traffic, for instance, volumes declined by more than 10 per cent. Also Kuehne + Nagel was affected by this negative development, but managed to increase its overall volumes by 6 per cent in the third quarter of 2012.

“On a nine months comparison, EBIT conversion was at 30.5 per cent (previous year: 33.5 per cent); the operational result was 6.0 per cent lower than in the previous year’s period.”

Kuehne + Nagel increased its airfreight tonnage by three per cent in the third quarter and by two per cent in the first nine months of 2012, however, the operational result declined by ten per cent.

The road and rail logistics business saw volume declines owing to seasonality and adverse macroeconomic market conditions, especially in Southern Europe. Sales rose 8.2 per cent in the first nine months but EBITDA margin slipped from 1.4 per cent to 1.2 per cent.

“The improvement of results in the third quarter makes us confident of reaching the profitability targets we have set ourselves for the full business year 2012,” said CEO Reinhard Lange.

“Intensified cost management as well as a continuous improvement of the services for our customers will be the foundation for profitable growth.”

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