Kuehne + Nagel’s contract logistics division has reported a year-on-year downturn of £6.2m (CHF9m) in earnings before interest and tax (EBIT) for the first quarter of 2015, however, overall group earnings grew two per cent year-on-year.
New business wins in the contract logistics sector slowed as a result of volume reductions in existing businesses with customers in Western Europe. In addition K+N noted that the strong Swiss Franc disproportionally affected the turnover and gross profit development negatively. Structural changes and price negotiations with contract logistics customers in Western Europe as well as the build-up of resources for organic growth impacted the result negatively.
Despite a marginal decrease of 0.7 per cent in container volumes in the Asia-Europe trade lanes, the group reported a 2.2 per cent upturn in gross profit for its sea freight business. In addition, EBIT grew by 2.2 per cent.
Meanwhile airfreight tonnage for the first quarter was up seven per cent, with considerable gain in the European export market and growth in volumes in export activities from North America and Asia. EBIT for the division increased by 9.7 per cent compared to the previous year.
Although the K+N noted that “positive development of results continued”, net turnover in the overland division dipped 15.2 per cent due to the discontinuation of project business and lower rates as a result of declining diesel prices. EBIT, however, improved from £2m (CHF3m) in the first quarter of 2014 to £2.7m (CHF4m) due to business wins in the focused industry segments and strict management of operational costs.
Dr. Detlef Trefzger, CEO of Kuehne + Nagel International, said: “The development of our results is remarkably positive, considering the decreasing import flows of goods to Europe due to the weakness of the Euro. In addition, the strong Swiss Franc negatively affected the result. We will pursue our strategy of profitable growth.”