Kerry posts strong profits, pushes ‘One Belt One Road’ investments

A 24 percent increase in Kerry Logistics International Freight Forwarding (IFF) profits pushed growth in the company’s core net profit up 4 percent, to US$142.1 million for 2016, as total revenue increased 14 percent, to $2.71 billion.

The IFF division growth was propelled by contributions from recently acquired Apex Maritime in the US, and strong performance in Asian markets. Kerry’s International Logistics division also posted strong numbers despite a “bearish market,” accounting for 79 percent of the Group’s total segment profit. Greater China remained a major contributor to revenues.

The latest numbers substantiate the company’s plans to offload its 15 percent stake in Hong Kong cargo terminal Asia Airfreight Terminal Company (AAT), to invest in the Commonwealth of Independent States (CIS) and focus on its e-commerce business, where cross-border e-commerce is particularly strong between Greater China and ASEAN. Kerry noted that it had won new e-commerce customers in Vietnam.

Kerry’s CIS investments are part of an ongoing buildup along trade routes between Asia and Europe in line with China’s strategic ‘One Belt One Road’ initiative. Without naming the company, Kerry said that it entered into “definitive agreements in 2016 to acquire a controlling stake of a freight forwarding group based in the region.” The statement said that, “the acquisition scheduled for completion by May 2017 will open the door to potential markets with growth prospects.”

George Yeo, chairman of Kerry Logistics, explained that the company was “expanding our network by sea, air, road and rail.” He added that, “the acquisition of the freight forwarding group in CIS countries will significantly expand our coverage in Central Asia. The opening of new road and rail freight routes from China to Europe and Pakistan will enable us to offer different options to our customers.”

Yeo also hinted at protectionist currents in the global economy, noting that, “whatever changes may result from policy changes in the US and other countries, Kerry Logistics stands ready to help our customers adjust to them quickly and optimally. ”

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