Airfright earnings down 4.8 percent at K+N in ‘tense’ third quarter

Kuehne + Nagel said a “tense” global airfreight market in the third quarter and continued pressure on margins contributed to shrinking demand and further capacity increases. As a result, Q3 earnings before interest, tax, depreciation and amortization (EBITDA) in its airfreight division were down 3.6 percent, year-over-year, to US$272.6 million, while operating profit fell 3 percent to $225.3 million.

Q3 total earnings fell under downward pressures, falling 4.8 percent, y-o-y, to $178.85 million against the same period in 2015.

Kuehne + Nagel stressed its longer-term performance in its Q3 press release and was optimistic about the impending quarter. Compared to the first nine months of 2015, total volume increased by 2.2 percent. Gross profit for the entire company rose by 6.4 percent, y-o-y, to $4.95 billion and the EBIT-to-gross profit margin was 30.7 per cent, up slightly from 2015’s 30 percent. EBIT improved by 8.9 percent to US$ 222.29 million, y-o-y.

In the first nine months of 2016, net turnover for the Kuehne + Nagel Group decreased by $180.87 million to $12.37 billion. Operational results (EBITDA) improved by 5.1 percent to $825.52 million. Detlef Trefzger, CEO of Kuehne + Nagel, said that, “Cautious consumer behavior in parts of the EU and the USA resulted in lower export volumes in Asia. In addition, the tougher situation in the shipping industry increased pressure on seafreight margins. By maintaining our Group’s focus on industry-specific logistics solutions and high-quality services, we succeeded in achieving growth and stable results despite the demanding market environment. We are confident about the business development in the fourth quarter of 2016.”