K+N reports improved airfreight market in Q3

Kuehne+Nagel’s airfreight operating profits and revenues were up in the third quarter of the year on the back of improved market and despite a decline in volumes.

The Switzerland-headquartered forwarder saw third-quarter air cargo revenues increase by 8.7% year on year to Sfr1.2bn, gross profits were down 4.3% to SFr315m and earnings before interest and tax (ebit) increased 89.9% to SFr169m.

The company said that ebit was helped by a positive one-off impact of SFr63m due to early settlement of the contingent consideration of an acquisition from 2018. With this stripped out, ebit would have been up by 19.1% on last year.

Airfreight volumes for the period were down 12.8% year on year to 354,000 tonnes, but increased compared with the second quarter.

The company cited improved market conditions in the third quarter of 2020, including the automotive sector and perishable goods. It said this led to a greater than normal seasonal uplift in air volumes versus the second quarter. Crisis goods, on the other hand, increasingly shifted to alternative transport routes.

The company was also keen to promote expansion in pharma capabilities — as many are given the upcoming vaccine release — stating that in September 2020 it opened new pharma hubs in Brussels and Johannesburg with direct tarmac access.

Overall, Kuehne+Nagel saw revenues for the third quarter decline by 4% year on year to SFr5bn, ebit was up 31.1% to SFr371m and earnings were up 24.3% to SFr266m.

It said that strict cost management drove earnings growth, while an improved market environment supported third-quarter performance.

Kuehne+Nagel International chief executive Detlef Trefzger said: “With our motivated team, we are ready for further growth together with our customers, especially in the pharma and healthcare and e-commerce sectors. Even though we expect considerable uncertainties in the coming months, we are well prepared.”