Strong start to 2018 masks K+N’s weak Q4 results

Swiss forwarding giant Kuehne + Nagel just released its annual results, which show respectable growth in volume and profit looking at the year as whole, but a less fortunate story during the fourth quarter, in which airfreight volume declined 1.5 percent, year-over-year, to 441,000 tonnes and operating profit from airfreight stayed flat, at about US$19 million – the same figure it reported in Q4 2017.

Zooming out to compare the 2017 and 2018 years, operating profit from airfreight increased by a healthy 13 percent and airfreight tonnage by 11 percent, to 1.7 million tonnes.

Many airports, airlines and forwarders have reported less-than-stellar year-over-year results during Q4 2018, reporting slim or negative growth margins in volumes and profit figures. So, it’s safe to say the company’s struggle during fourth quarter is attributable to poor market conditions.

It doesn’t seem that the issue was unique to airfreight, though. Operating profit from seafreight – its highest grossing segment – dropped about 15 percent in Q4 to $81 million, y-o-y.

The company said that an “active M&A strategy” continues to be a core part of its plan to underpin its airfreight business. In 2018, it made two such acquisitions: the first was Ecuador-based Panatlantic Logistics SA in August, an investment in the transportation of Latin American perishables, followed by the purchase of Quick International Courier, a U.S.-based time-critical logistics company in November.

It noted that shipments made within its tech platform “eTouch,” now represent about half of its airfreight portfolios.

Looking forward to 2019, it would seem the company will continue charging ahead with investments in its airfreight, pointing to the booming pharma industry and a steady demand for the transportation of perishable produce, but said anticipates less than 2 percent volume growth within its airfreight business in 2019.