Kerry reports growth in global business expansion
Kerry Logistics Network Limited reported an increased revenue of 8 percent to HK$41,139 million, compared to its 2018 performance, through the Group’s annual results for 2019. International Freight Forwarding (IFF) business recorded a 13 percent increase in segment profit to HK$622 million (2018 saw HK$549 million).
The Core operating and net profits increased by 17 percent to HK$2,765 million and by 4 percent to HK$1,374 million respectively compared to the 2018 figures during the same period. Integrated Logistics (IL) business recorded a 15 percent increase in segment profit to HK$2,435 million (2018 saw HK$2,111 million).
Riding on the booming intra-Asia trade, the Group’s IFF division recorded strong growth in the first ten months in 2019, resulting in a 13 percent increase in segment profit, contributing 20 percent to the total segment profit. In August 2019, the Group acquired a majority interest in Turkey’s ASAV Logistics Services Inc. to further the expansion of its global network.
Kuok Khoon Hua, Chairman of Kerry Logistics, said, “2019 was a challenging and turbulent year. Global economic growth weakened considerably as international trade disputes dragged on and Mainland China’s GDP growth slowed down. Social unrest in Hong Kong further impacted the local economy and affected consumer confidence. Despite the weak product demand and lower productivity worldwide, we registered growth in revenue, core operating profit and core net profit again in 2019. Supported by our diversified business portfolio, extensive geographical coverage and broad customer mix, we were able to achieve positive growth across all regions, with 55 percent increase in profit attributable to the Shareholders year-on-year.”
In addition to improved cost efficiency in Mainland China, the Group’s IL division recorded a 15 percent segment profit growth in 2019. In Asia, segment profit increased by 22 percent in 2019, supported by the strong performance of the Thailand operation. The extent of increase should have been larger if not for the Group’s ongoing financing of the Kerry Express operations in Malaysia, Vietnam and Indonesia amounting to HK$70 million.
William Ma, Group managing director of Kerry Logistics, said, “The COVID-19 pandemic outbreak is creating a global business and financial turmoil. As of today, one-third of the world’s population is under varying degrees of lockdown. The world has been switching to a more domestic-based supply chain for daily essentials. Riding on Kerry Logistics’ extensive exposure in various markets, the Group is in a relatively secure position to accommodate the strong demand for domestic logistics services particularly in Hong Kong, Taiwan, Mainland China, Thailand and some Asian countries. Nonetheless, when the pandemic comes under control, the global supply chain will be in chaos and the recovery is expected to be slow and painful. We are reserving our strengths and getting prepared to play a more vital role in supporting our customers to move well ahead of the aftermath.”
The annual reports say that In the United Arab Emirates, Group’s 70,000-square-feet bonded logistics facility commenced operation in Dubai in 2019 Q4. In Mainland China, Group’s construction of the 827,000-square-feet logistics centre in Qingdao is expected to complete in 2021 Q2,
Kerry’s 646,000-square-feet logistics centre in Guangzhou is projected for completion in 2021 Q4. In Taiwan, the 430,000-square-feet logistics centre in Guanyin is expected to resume operation in 2021 Q3 after restoration from the fire in February 2019 is completed.
On 31 March 2020, the Group completed the acquisition of the remaining 49 percent in Apex, the third largest NVOCC in terms of volume from Asia to the US in 2019.