Kuehne & Nagel Profit Rises as Cuts Help Resist Slump
(Corrects sales estimate in second paragraph.)
Kuehne & Nagel International AG (KNIN), the world’s biggest sea-freight forwarder, said second-quarter profit rose as the market for shipments by sea expanded and a reorganization helped the company reduce costs.
Net income rose 6.3 percent to 153 million Swiss francs ($162 million), meeting analyst estimates collected by Bloomberg, Schindellegi, Switzerland-based Kuehne & Nagel said today in a statement. Net invoiced turnover advanced 1.1 percent to 4.37 billion francs, trailing the average estimate of 4.44 billion francs collected by Bloomberg. Earnings before interest and taxes gained 8.2 percent to 197 million francs.
Subdued economic activity is weighing on shipping companies as countries sharing the euro continue to struggle with the longest recession since the currency was introduced. Kuehne is closing 92 locations in its rail and road unit to focus on profitable regions.
“The results underline that the measurements introduced to improve efficiency on a group-wide level are effective,” Chairman and interim Chief Executive Officer Karl Gernandt said in the statement. “Although we do not anticipate a significant stimulation of global trade in the second half, we will continue to focus on profitable growth.”
Air freight volumes handled in the first half rose 4 percent, in contrast with a contraction in the market, while container volumes rose 3 percent, ahead of market growth of 1 percent to 2 percent, the company said.
Kuehne & Nagel reiterated a forecast that its sea-freight volume will rise 4 percent to 6 percent this year, outpacing market growth of 2 percent to 3 percent. Air-freight will increase 1 percent to 3 percent, compared with a market Kuehne now forecasts to decline by as much as 2 percent.
Former Chief Executive Officer Reinhard Lange stepped down May 7 for health reasons, with Gernandt now leading the company on an interim basis.
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