Sea freight leads Kuehne & Nagel improvement
Kuehne & Nagel, the Swiss based freight forwarding and logistics provider, has released its results for the first quarter of 2004. Aided by the strong growth in volumes to and from China and the recovering US market it has been able to considerably improve its performance on the same quarter in 2003.
Overall the company managed to increase its net revenues to CHF2,003m (€1,281m), an increase of 16.5%. However most markedly it was able to increase its operating profits by 38.1% to CHF83m (€53m).
A 22% rise in sea freight volumes led to an increase in turnover of 13.7% to CHF1,349m (€863m). Operating profits also rose but at a slower rate, leading to lower margins. This would suggest that in a market typified by tightening capacity and rising rates (especially on the China trade routes) the company has not been able to pass on all the increases to its clients.
Kuehne & Nagel’s air freight division experienced an 11% increase of turnover to CHF545m (€348m). A significant improvement of profitability was achieved which saw a 56% increase in operating profits to CHF27.4m (€17.5m). Management put this down to increased levels of efficiency and cost control.
One of the biggest improvements occurred in its contract logistics division. Turnover increased by 8.4% to CHF295m (€188m), but operating profits more than doubled to CHF10.6m (€6.8m), corresponding to an operating margin of 3.6%. This was not only helped by growth in the US economy but also a strengthening European high tech market. Management also attributed the turnaround to the re-structuring measures which it had taken over the past year.
