Kuehne+Nagel Q12024 earnings down 40% on -ve exchange rate effects

Kuehne+Nagel Group’s net turnover in the first quarter of 2024 declined 18 percent to CHF 5.5 billion ($6.1 billion) with an EBIT of CHF 376 million and earnings before minorities of CHF 278 million ($306 million), down 40 percent.

"The results were lower overall and impacted by negative exchange rate effects of three percent relative to the prior year," says an official release.

The start of the business year 2024 was characterised by a slightly improving demand trend for transportation services in sea and air logistics, the release added. "The conversion rate, which describes the ratio of EBIT to gross profit for the group, stood at 18 percent in the first quarter of 2024, significantly higher than the pre-Covid value of 12 percent in the first quarter of 2019. Overall, the figures are above the corresponding pre-pandemic levels."

Stefan Paul, CEO, Kuehne+Nagel says: “In a challenging environment, Kuehne+Nagel started the business year 2024 with solid but lower year-over-year results. Our focus on efficiency and streamlined structures allowed us to reduce costs per unit by 12 percent in sea logistics and 14% in air logistics. By discontinuing the regional structure, we have laid the foundations for further growth and enabled more direct access to our customers worldwide. Additionally, we have strengthened our offering for our South East Asia customers through our strategic acquisition of City Zone Express, a Penang, Malaysia-based road logistics service provider."

Air logistics
The net turnover of air logistics in the first quarter of 2024 was down 15 percent at CHF 1.6 billion ($1.7 billion) with an EBIT of CHF 94 million, down 39 percent.

The conversion rate was 24 percent, and the air freight volume reached 491,000 tonnes by the end of March 2024, which was 3.4 percent higher than in the previous year.

"A new temperature-controlled area was added to Kuehne+Nagel’s air logistics gateway at New York’s JFK Airport, covering a total storage space of 7,200 sq.m. This location plays a crucial role in further developing healthcare logistics in the United States."

Sea logistics
Sea logistics net turnover declined 28 percent to CHF 1.9 billion with an EBIT of CHF 197 million, down 43 percent.

"The conversion rate was 39 percent. The sea freight volume reached one million TEU by the end of March 2024. During the first three months of the year, the business segment delivered a volume growth of 1.5 percent year-on-year.

"Additionally, the visibility platform Seaexplorer was expanded to include schedules for less-than-container-load (LCL) shipments. In the context of the Red Sea crisis, customers successfully optimised their transport planning using real-time information provided by Seaexplorer."

Road logistics
The net turnover of road logistics in the first quarter of 2024 declined 10 percent to CHF 860 million with an EBIT of CHF 30 million, down 42 percent.

In March 2024, Kuehne+Nagel announced the acquisition of South East Asian road logistics service provider City Zone Express. The company has more than 500 employees and will significantly expand Kuehne+Nagel’s offerings in cross-border transportation in Asia, the release added.