Kuehne+Nagel Q1 earnings decline 45%
Air logistics net turnover dropped 41% to CHF 1.9 billion and EBIT declined 64% to CHF 154 million
The rapid normalisation of the supply chain environment saw Kuehne+Nagel Group report a 45 percent decline in earnings at CHF 462 million ($522 million) on 37 percent decline in turnover at CHF 6.7 billion ($7.6 billion).
"The start of the 2023 business year was marked by geopolitical and inflation-related challenges worldwide. In parallel, the supply chain environment quickly normalised after the boom years of 2021 and 2022. Although demand for transport services declined as expected, the Kuehne+Nagel Group achieved solid results. The Corona-related special economic situation distorts the comparison with the previous year. In the context of a normalised business environment and compared to the business performance before the pandemic, the first quarter of 2023 represents a record result," says an official release.
Stefan Paul, CEO, Kuehne+Nagel says: "The macroeconomic environment remained extremely challenging at the start of 2023. This does not come as a surprise as signs of significant weakening emerged last autumn, following the period of extraordinary, pandemic-related demand for logistics services.
"With our focus on cost control through the consistent exploitation of the asset light model, the Kuehne+Nagel Group was able to hold its own in this environment and expand its market share worldwide. We already see early successes from the strategic Roadmap 2026 presented in March."
Net turnover dropped 41 percent to CHF 1.9 billion ($2.1 billion) and earnings before interest and taxes (EBIT) declined 64 percent to CHF 154 million ($174 million).
Air freight volumes totalled 475,000 tonnes for the first quarter 2023, the release added. "In an overall declining air freight market, Kuehne+Nagel maintained a stable market share while gaining share in areas like the transport of perishable goods."
As part of a long-term charter agreement with Atlas Air, Kuehne+Nagel took delivery of the last Boeing 747 ever produced in February in Seattle. The jumbo jet will be used primarily for freight on the transpacific route for Kuehne+Nagel’s subsidiary Apex Logistics.
Net turnover and EBIT declined 45 percent to CHF 2.7 billion ($3 billion) and CHF 344 million ($389 million), respectively.
"The container volume was 987,000 TEU over the first three months of 2023. Kuehne+Nagel Sea Logistics made significant market share gains, establishing leadership on the transpacific route for the first time."
Net turnover declined marginally (three percent) to CHF 956 million ($1.1 billion) while EBIT increased 73 percent to CHF 52 million ($59 million). "Around six million orders were processed in the first quarter. The networks continued to be well utilised, enabling the unit to post a record quarterly result. In March, Kuehne+Nagel put the first 23 electric trucks into operation in France, which will be used primarily in urban environments."
Turnover increased eight percent to CHF 1.2 billion and EBIT was up 41 percent to CHF 62 million.
With the opening of a new distribution centre for Decathlon, the French sporting goods retailer, the business unit expanded logistics capacity for the customer in Latin America by around 30 percent. The new facility in Chile is equipped with state-of-the-art robotics for omnichannel picking, the release added.