News / Kuehne + Nagel profits halve in Q3 – but 'we gained market share'

© Ricochet69

Kuehne + Nagel this morning said it had delivered a “good performance” in the third quarter, a statement perhaps undermined by its hefty 52% drop in ebit.

That CHF321m ($358m) result, followed a 46% drop in turnover, to CHF5.4bn ($6bn), while for the nine months, ebit fell 49% to CHF1.58bn on turnover down 41%, at CHF18.1bn.

But chief executive Stefan Paul claimed the group had “performed well”.

“We gained market share and secured our yields. We achieved important successes in the implementation of the strategic Roadmap 2026, particularly in the area of renewable energy and in the growth markets of Asia. In the final quarter of 2023, we will continue to focus on cost control, which is firmly embedded in our corporate culture.”

Total expenses for the nine months fell 7% and, according to Loadstar Premium today, K+N’s cost control is “flawless”. It did cut fewer jobs than DSV however, which said yesterday it had cut jobs in air and sea. K+N’s staff numbers actually increased from September 2022 to September 2023, although full time equivalents dropped by just over 1,000, to 92,600.

K+N, the top airfreight forwarder by volume, has been busy beefing up its air product, opening a new air logistics hub at Charles de Galle last week, while this week it added two destinations to its Atlas-operated freighter network, to support demand from the semi-conductor industry. Air freight has however been challenging in the weak market: net turnover for Q3 fell 46% to CHF1.51bn ($1.68bn – compared with $1.65bn at DSV) . Ebit was down 58% to CHF136m.

K+N said that it had handled about 1.5m tonnes of air cargo in the nine-month period, with perishables and aerospace performing “particularly well”.

In sea, Q3 turnover was down 61%, to CHF1.9bn, and ebit fell 53%, to CHF236m. K+N said: “Container volumes stood at 3.2m teu through the end of September 2023. In an overall market that continued to decline, Kuehne + Nagel Sea Logistics recorded slight volume growth in the third quarter of 2023, which intensified in September. Market share gains were mainly on the Asia-Europe and transpacific routes.”

As with DSV, road fared slightly better in the nine-month period, with turnover down 10%, but ebit down just 1%. However, Q3 saw a 15% drop in turnover and a 35% drop in ebit, to CHF26m. K+N said the economic slowdown in Europe was to blame.

Contract logistics seems less affected by the weak market conditions, with ebit up 14% in the nine months, although it was down 17% in Q3, to CHF48m. “The conversion rate of 6.2% shows the positive effect of an improved business mix biased toward e-commerce and healthcare solutions, while maintaining an above market growth rate,” noted K+N.

Also like competitor DSV, which revealed yesterday it had exclusive rights to the logistics for Saudi Arabia’s NEOM region, K+N has the contract to transport 1.4m tonnes of equipment for the construction of wind turbines there, on behalf of Envisjon Energy, by 2025. But that looks like small potatoes against DSV’s deal.