Brexit, high costs undercut strong Q1 business at K+N
Increased volumes and turnover failed to offset currency depreciation, undercutting a strong showing at Kuehne + Nagel Group and ultimately pushing EBITDA and earnings growth into the red. For the first three months of 2017, K+N’s EBITDA was US$257 million, just shy of the previous year’s numbers, while earnings also fell by approximately $4 million to $165 million.
The Switzerland-based global logistics company blamed rising costs, the chilling effect of Brexit, and the subsequent depreciation of the pound for the company’s underwhelming earnings.
That said, Kuehne + Nagel Group’s other metrics of growth carried into the first quarter of 2017, following a strong closeout last year, with year-over-year turnover up by 7.2 percent to $4.3 billion and gross profit up 3.5 percent, y-o-y, to $1.65 billion.
Picture Source: http://aircargoworld.com/brexit-high-costs-undercut-strong-q1-business-at-kn/
Detlef Trefzger, CEO of Kuehne + Nagel, stressed that the company maintained an “optimistic outlook for continued successful business development this year.” He added that airfreight continued to experience strong growth and that K+N had gained significant market share. “This increase in volume and productivity, as well as cost control, mitigated the ongoing pressure on margins. Our strategic approach for overland and contract logistics led to a further improvement of results.”
Kuehne + Nagel’s airfreight results were the latest in a slew of reports of increased volume and demand for air cargo. The company saw “considerable growth” in Q1 of 2017, with volumes up by 15.5 per cent to 350,000 tonnes.
The Swiss logistics company remarked on growth in pharma and perishables, as well as e-commerce. In airfreight, the company also accredited cost control and to maintaining “high levels” for both the conversion rate, at29.9 percent, and EBIT, at $72 million.