Kuehne & Nagel Profit Rises as Cost Cuts Help Resist SlumpRichard Weiss
Kuehne & Nagel International AG, 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 gained 6.3 percent to 153 million Swiss francs ($162 million), Schindellegi, Switzerland-based Kuehne & Nagel said today in a statement. That met analyst estimates compiled by Bloomberg. Net invoiced turnover advanced 1.1 percent to 4.37 billion francs, trailing the average estimate of 4.44 billion 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.”
The shares advanced 3.5 percent to 114 francs at 10:06 a.m. in Zurich, valuing the company at 13.7 billion francs.
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.
Kuehne today reduced the outlook for its road and rail business, which failed to break even in the first half. The company forecasts sales in the unit may rise 0 percent to 2 percent, down from an earlier forecast for as much as 5 percent growth.
Former Chief Executive Officer Reinhard Lange stepped down May 7 for health reasons, with Gernandt now leading the company on an interim basis.