News / Kerry Logistics stays bullish as profits decline in a 'tough market'

Kerry Logistics' Vic Cheung, group managing director and Ellis Cheng, executive director

Hong Kong-headquartered 3PL Kerry Logistics Network (KLN) today was the latest freight service provider to report double-digit declines in revenue and profits for 2023.

It announced a 42% decline in full-year revenues to HK$47.4bn (US$6bn), while net profit fell 78% to HK$791m.

Last year’s financial performance was also impacted by the sale of its Asia Pacific and European e-commerce and express businesses to SF Holding in Q3, and the announcement in December to de-consolidate Kerry Express Thailand through dividend distribution.

However, its remaining business lines – Integrated Logistics and International Freight Forwarding – both saw profitability hit as the market normalised following the pandemic boom.

Integrated Logistics recorded a segment profit of HK$1.3bn, down 7% on 2022, while International Freight Forwarding saw its profit drop 70% ,to HK$1.4bn, as air and ocean freight rates plummeted.

“Despite a tough market, new opportunities emerged amid changing consumer demands and the reshuffle of global supply chains,” said group MD Vic Cheung.

“KLN Group was able to turn challenges into opportunities and provided customers with viable and cost-effective alternatives to keep their cargo moving and delivered. KLN Group’s overall performance in 2023 was in line with expectations and on par with global peers.”

The company noted that Integrated Logistics had been hit by the post-pandemic slowdown in Hong Kong, but a cost-cutting programme in mainland China had led to 17% increase in profits.

“We are determined to provide customers with alternative solutions in the near-term and are optimistic that our IL business in Asia is likely to benefit from the shifts in the supply chain in the mid-term,” Mr Cheung added.

“Looking ahead, the group will continue to create synergies with SF Holding through extensive collaborations, actively identify new opportunities to grow its business sustainably and deliver greater value for its shareholders,” he said.

Despite the general weakness in forwarding, Kerry said the year had been particularly positive for its out-of-gauge and project cargo arm.

“Various mega industrial projects were completed, and records were broken by project logistics teams in the mainland of China, Central Asia and Europe in 2023,” said the company. “The segment delivered satisfactory results and is expected to become one of the development drivers of the IFF division.”