Kerry Logistics reports rise in revenues and profits in 2019
31 / 03 / 2020
By Damian Brett
Kerry Logistics Network last year saw revenues and profits increase last year, with its logistics and forwarding businesses performing well.
The company last year saw revenues increase by 8% year on year to HK$41.3bn, while core operating profit was up 17% to HK$2.8bn and core net profit improved 4% to HK$1.4bn.
The International Freight Forwarding (IFF) business recorded a 13% increase in segment profit to HK$622m, while the Integrated Logistics (IL) business recorded a 15% increase in segment profit to HK$2.4bn.
Kuok Khoon Hua, chairman of Kerry Logistics, said: “2019 was a challenging and turbulent year. Global economic growth weakened considerably as international trade disputes dragged on and Mainland China’s GDP growth slowed down.
“Social unrest in Hong Kong further impacted the local economy and affected consumer confidence. Despite the weak product demand and lower productivity worldwide, we registered growth in revenue, core operating profit and core net profit again in 2019.
“Supported by our diversified business portfolio, extensive geographical coverage and broad customer mix, we were able to achieve positive growth across all regions, with 55% increase in profit attributable to the shareholders year-on-year.”
The company said that its International Freight Forwarding business benefited from the “booming intra-Asia trade”.
The majority of its regions recorded growth except Taiwan. The major contribution came from mainland China which registered a 23% growth.
“The successful consolidation of its industrial project logistics services and overland rails worldwide allowed the group to tap into new markets beyond its traditional customers in the consumer products industry,” the company said.
In August 2019, the group acquired a majority interest in Turkey’s ASAV Logistics Services Inc. to further the expansion of its global network.
Meanwhile, on March 31, the group completed the acquisition of the remaining 49% in Apex, the third largest NVOCC in terms of volume from Asia to the US in 2019, at a consideration of approximately US$176m.
Looking ahead, William Ma, group managing director of Kerry Logistics, said: “The COVID-19 pandemic outbreak is creating a global business and financial turmoil.
“As of today, one-third of the world’s population is under varying degrees of lockdown. The world has been switching to a more domestic-based supply chain for daily essentials.
“Riding on Kerry Logistics’ extensive exposure in various markets, the Group is in a relatively secure position to accommodate the strong demand for domestic logistics services particularly in Hong Kong, Taiwan, Mainland China, Thailand and some Asian countries.
“Nonetheless, when the pandemic comes under control, the global supply chain will be in chaos and the recovery is expected to be slow and painful. We are reserving our strengths and getting prepared to play a more vital role in supporting our customers to move well ahead of the aftermath.”