Kuehne+Nagel net turnover falls 46% YoY

Swiss freight forwarder Kuehne+Nagel Group reported CHF 5.4 billion ($6.1 billion) in net turnover for the third quarter, a decline of 46% year over year. THE BIG PICTURE: Freight forwarders like Kuehne+Nagel have been struggling this year, especially when compared to 2022, which was a banner year for them. In the first half of 2023, K+N saw net turnover decline 38% YoY. Despite such a sharp decline in net turnover, in today’s earnings report K+N said it had “good results in the months January to September 2023 in a market environment that remained challenging.”. [caption id="attachment_98720" align="alignleft" width="300"] 747-8F operated by Atlas Air. (Photo/Kuehne+Nagel)[/caption] “The solid financial results for the first nine months of 2023 reflect accelerated cost management and continued strong yield management amidst subdued demand for logistic services,” K+N Chief Executive Stefan Paul said in today’s earnings call. “They also reflect the extraordinary comparison basis of 2022 results.” BY THE NUMBERS: Q3 figures show K+N struggling against a difficult market: EBITDA was $713.9 million, down 42% YoY. Air logistics net turnover was $1.7 billion, down 46% YoY. Air logistics EBIT was $151.7 million, down 58% YoY. K+N’s net turnover for the first nine months of 2023 was $20.3 billion, down 41% YoY. Additionally: EBITDA was $2.4 billion, down 42% YoY. Air logistics net turnover was $5.6 billion, down 45% YoY. Air logistics EBIT was $478.6 million, down 63% YoY. WHAT THEY’RE SAYING: K+N executives attributed the company’s “solid” performance to cost management and flexibility. “Our focus on cost control has intensified over the course of the year, with visible sequential cost reduction in Q2 that we extended in Q3,” Paul said. “This exemplifies the flexibility of our business model and long-standing experience of rightsizing our cost base to the market environment. Our strategic focus on yield management also supported our financial results in the first nine months of the year, with particularly strong gains in the first half.” STATE OF PLAY: In the first nine months of 2023, about 1.5 million tonnes of airfreight were handled, the earnings report stated. The perishables and aerospace segments performed particularly well. “Destocking effects may now be fading but inflation challenges persist, and geopolitical tensions are rising further,” K+N Chief Financial Officer Markus Blanka-Graff said in the earnings call. “We have been managing through countless economic cycles and periods of unforeseen volatility — a credit to a highly flexible asset-minded business model, combined with our entrepreneurial spirit.” FLASHBACK: K+N reclaimed the top spot on Air Cargo Next ’s Power 25 list of top freight forwarders, released in July. NOTEWORTHY: In recent months, the K+N Air Logistics business unit opened a new airfreight gateway at Paris Charles de Gaulle Airport (CDG) with around 13,000 square meters of storage space and direct tarmac access. K+N has also finished moving its customer relationship management (CRM) system to the cloud. “We have now moved everything into the MS 365 Cloud, including … our customer service activities,” Paul said. “We are connecting now our operational systems with our CRM system in order to carve out cost and to be much more effective in the way we deal with our customers and manage customer service.” Also, Paul recently visited China to review the country’s speed and technological progress in the supply chain. “Following the COVID pandemic, many in the West seem to have the perception that the growth we were used to seeing from China would come to an end,” Paul said. “These visits showed me that the potential remains despite the global slowdown in [gross domestic product] growth. We as a company must understand the evolving service requirements to be ready to take advantage of this dynamic so that we can grow with them both inside and outside of the country. And, in particular, to support our end customers in North America and the European marketplace.” FUTURE LOOK: K+N executives are not optimistic about recovery in Q4. “As suspected, there was no peak season in Q3, but volumes did improve modestly once again on a sequential basis,” Paul said. “We do not expect an airfreight peak season [in Q4]. Typically a peak would entail a volume uplift from Q3 to Q4 in the range of high single-digit percentage. Our expectation for Q4 this year is for volumes similar to that for Q3." MARKET REACTION: Shares of Kuehne+Nagel (OTCMKTS: KHNGY) were down 4.89% from market open to $53.52 as of market close today. K+N has a market capitalization of $32.4 billion. Editor’s note: All amounts have been converted to U.S. dollars.

Kuehne+Nagel net turnover falls 46% YoY

Execs do not expect to see a peak season

Hawaiian Airlines cargo revenue falls 19% in Q3

Air Inuit to convert 737-800s with AEI

Related Posts

Challenge Group launches engine dolly at LGG

New de minimis executive action targets Chinese retailers

CVC willing to bump DB Schenker bid after losing to DSV

Air Inuit to convert 737-800s with AEI

Cargo Facts Free Newsletters

Cargo Facts Connect Podcast

Follow Us

Welcome Back!

Retrieve your password