Kuehne + Nagel’s earnings grew 1.1 percent in the first nine months of 2011 from a year earlier as the Swiss logistics company boosted ocean container and air cargo shipments in a softening market.
The slight increase, to $508.5 million, contrasted with a 3.8 percent slide in revenue to $16.35 billion. Currency adjusted earnings rose 15.6 percent while revenue was up 10.1 percent, said the world's top forwarder. Operating profit dipped 2.4 percent to $815 million but was 11.5 percent higher than a year ago after adjusting for the strength of the Swiss franc.
“Considering the softening market growth, we are satisfied with our results in the first nine months of 2011. Volatility is high and the fourth quarter is expected to remain challenging,” said Reinhard Lange, CEO of Kuehne + Nagel International AG.
Ocean container traffic jumped 14.5 percent in the first three quarters, easily outpacing estimated global market growth of about 5 percent. Growth was particularly strong outbound from Asia to the Middle East and South America. Reefer container traffic grew “significantly” following the expansion of the company’s specialized perishables network.
The earnings-to-gross profit margin stabilized at a “very high” 35.3 percent against 35.8 percent a year ago, despite slightly lower margins due to “very low” ocean freight rates.
Kuehne + Nagel’s air tonnage increased 14.5 percent in the first nine months while the global market stagnated compared with the same period in 2010. The company said its air business performed well in Europe, South America and North America, while demand in Asia declined.
The earnings-to-gross profit margin increased to 32.3 percent from 30.5 percent as higher productivity compensated for higher investments in specific industries such as pharmaceuticals and high-tech.
Road and rail revenue increased 4.9 percent [currency adjusted 19.4 percent] as the company expanded its European network and entered the South American overland market with the acquisition of Brazil’s Grupo Eichenberg. Contract logistics revenue declined by 5.7 percent [currency adjusted up 7.9 percent] as the unit focused on expanding services for multinationals and consolidating at strategic logistics hubs.
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