Joseph Bonney, Senior Editor | Jul 16, 2012 11:49AM EDT
Kuehne + Nagel’s net profit fell in the first half of 2012 as slowing global economic growth cut into margins for the Swiss forwarding and logistics giant.
Turnover rose 2.8 percent to 10.062 billion Swiss francs ($10.25 billion), and gross profit increased 2.6 percent to $3.1 billion. Earnings before interest, taxes, depreciation and amortization fell 9.6 percent to $464 million, excluding the company’s $66 million antitrust fine in the first quarter. Net profit declined 11 percent to $283 million, excluding the antitrust fine.
“In the first half of 2012, muted consumption in all parts of the world and increased market volatility influenced the global logistics business,” CEO Reinhard Lange said. He said routes from Asia to North Europe and North America were particularly affected, but that K+N grew faster than the overall market on both routes.
Kuehne + Nagel said its volume growth outpaced the overall market. Chairman Karl Gernandt said the company “is getting back on track to achieve the profitability and productivity goals set for the full year 2012.”
K+N’s sea freight volume grew 8 percent, but the company said carrier rate increases cut margins and caused operating profit to slip 10.9 percent. Sea freight earnings before interest and taxes were 30.4 percent of gross profit in the second quarter and 28.3 percent in the first quarter.
Air freight operating profit also declined 10.9 percent year-over-year, although tonnage rose 1 percent. EBIT was 27 percent of gross revenue in the second quarter and 23.5 percent in the first quarter.
Contract logistics net invoiced turnover, adjusted for currency exchange, rose 6.9 percent as the closure of unprofitable locations in France and southern Europe offset gains in North Europe, Asia and the Americas.
Operating results from contract logistics declined 15.3 percent year-over-year, and the unit’s EBITDA margin slipped to an “unsatisfactory” 3.3 percent from 4.1 percent a year earlier, the company said.
Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter at @JosephBonney.