Kuehne+Nagel's first-quarter profit drops 14.2 per cent

Lower margins, an antitrust fine and cost increases impact upon results.

The company's logistics terminal in Geel, Belgium.
The company's logistics terminal in Geel, Belgium.

The Swiss transportation and logistics company Kuehne+Nagel International has posted net earnings of CHF133m for the first quarter of 2012, a decrease of 14.2 per cent compared to CHF155m in the same period last year.

The company’s results were hit by a CHF65m franc antitrust fine levied by the European Commission in March.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) declined by 12.4 per cent to CHF218m – including the one-off item for the antitrust fine – to CHF153m.

Gross profit totalled CHF1.5bn, while turnover was CHF4.83bn.

Cost increases, lower margins in the forwarding business and the EC fine led to unsatisfactory results for the first quarter 2012, despite further volume growth, said the company.

Reinhard Lange, CEO of Kuehne + Nagel International, said: “In the first quarter of 2012, we had to cope with a number of adverse factors. Our investments in growth initiatives resulted in considerable cost increases. We will counteract this trend with strict cost control and measures to improve productivity. Furthermore, profit margins declined in sea and air freight. In addition, there [were] one-off charges due to a high antitrust fine, which was reported on 28 March 2012.”

In line with its strategic goals, the company increased growth in the transatlantic and transpacific trades. In sea freight, container volume grew by 9 per cent.

Besides the ongoing positive demand in South America, the company’s intra-Asia air-freight business volumes increased.

In road and rail logistics, the company made good progress in the European overland business.

In the contract logistics business, strong demand in Central Europe, Asia and South America resulted in a currency-adjusted increase of net turnover by 6 per cent.

Lange added: “As a consequence of the experiences made in the first quarter of 2012, we have intensified our cost management. We are confident that the measures implemented as well as solid growth will contribute to an improvement of results in the second half of the year.”