Operating profit was more than doubled for logistics firm Kuehne + Nagel in Q1, in which pressure increased on the strained supply chains. Results improved significantly within sea freight despite lower volumes.
Major logistics company Kuehne + Nagel reports a ”strong first quarter” with considerable revenue growth and an operating profit that more than doubled. However, the company still sees a great pressure on the global supply chains, while the Ukraine war prompts uncertainty ”in a still tense market environment.”
From the start of the year, the company has even seen the supply chain situation worsen. The supply chains have for a long time been marked by large bottlenecks at logistics hubs around the world as well as lack of capacity.
In the period, ”many” of the world’s ports were still plagued by congestion.
”Strong demand for capital and consumer goods continued in the first quarter of 2022. In parallel, the already strained supply chain situation deteriorated further,” says CEO Detlef Trefzger in a financial report announcement.
The already strained supply chain situation deteriorated further
Detlef Trefzger, CEO, Kuehne + Nagel
”Kuehne+Nagel was well prepared for this scenario and we were able to reliably meet customer demands for high-quality logistics services.”
Like rivals such as DSV, DHL and DB Schenker, Kuehne + Nagel has seen its results improve on the still red-hot logistics market.
Overall, the company’s top line soared by 68 percent in the first quarter compared to the same period last year with a net revenue of CHF 10.2bn (USD 10.6bn). The operating profit (EBIT) more than doubled, ending at CHF 1.1bn against CHF 431m in Q1 last year.
Sea freight results improve despite declining volumes
Within sea freight, Kuehne + Nagel reports container volumes of 1 million teu for the quarter. That is below the 1.1-million-teu volumes reported in the first quarter last year.
The company still managed to double its sea freight revenue, which ended at CHF 4.9bn against CHF 2.4bn, while the operating profit tripled to CHF 621m. The conversion rate landed at 63.8 percent.
Within air freight, results improved as well, with a revenue of CHF 3.1bn and an operating profit (EBIT) of CHF 425m. During the quarter, the division has felt the repercussions of the Russian air space ban following the Ukraine war outbreak.
”The sudden closure of Russian airspace led to multiple changes in airfreight routes between Asia and Europe. Together with the overall limited capacities, this led to a significantly higher operational workload in the first quarter of 2022,” writes Kuehne + Nagel in the announcement.
Russia’s invasion of Ukraine has made Kuehne + Nagel suspend shipments to, from and through Russia. Shipments of pharmaceutical, health and humanitarian supplies are exempted.
According to Kuehne + Nagel, it’s too soon to say how the company’s business will be affected by the war in Ukraine, however, ”the direct impact on the group is estimated to be minor.”
Wednesday, another of the world’s leading logistics firms, DSV, presents its figures for the first quarter.
