Kerry Logistics sees revenue and profits rise in H1 2020

Asia-based Kerry Logistics has achieved increased revenues and profits in the first half of this year, demonstrating its “diversity, adaptability and agility”, despite disruption caused by the Covid-19 pandemic.

The company saw core net profit rise up 26% to HK$845m in the first half of 2020 as profits at its international freight forwarding (IFF) segment surged by 40% to HK$403m.

The Hong Kong listed group’s revenue for the first six months to end of June increased by 10% year-on-year to HK$21,885m as core operating profit increased by 12% to HK$1,489m.

William MA, group managing director of Kerry Logistics Network, said: “The Covid-19 outbreak has brought a monumental change to the fundamentals of life, from how we live and work to how we produce and consume.

“For now, there is no end to the pandemic in sight, nor hint of what the ‘new normal’ will look like. In such highly volatile and uncertain environments, logistics has maintained its unrivalled importance.

“Kerry Logistics Network’s 2020 1H results clearly demonstrated our business diversity, adaptability and agility. The Group has not only adapted through the pandemic but achieved promising growth amidst heightened volatility and widespread downturn across industries.”

The group’s integrated logistics (IL) business recorded 2% drop in segment profit to HK$1,139m mainly due to the reduced profit contributed by lesser number of warehouses in Hong Kong year-on-year.

Should this impact be normalised, segment profit of the IL business would have increased by 2%, including a 6% year-on-year growth of Hong Kong warehouse business.

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Said a spokesperson: “The pandemic and its resultant widespread lockdowns have caused a drastic drop in the demand in a large number of non-essential products and thus affected the global manufacturing market.

“As a result, warehouse operations in Asia has been severely impacted, but a strong growth in the last-mile fulfilment and e-commerce logistics resulted in a positive growth for the IL division.”

In Asia, the group was able to record a 6% growth in the IL segment profit, riding on the substantial growth of its e-commerce and last-mile operations.

The “outstanding performance” of the Group’s IFF division saw its contribution to the total segment profit grow from 20% previously to 26% in first half 2020.

Added the spokesperson: “The global freight forwarding market was among the hardest hit sectors, made more severe due to travel bans. However, Kerry Logistics leveraged its unique market position as one of the very few Asia-based global freight forwarders, with broad exposure in key gateways across continents and ability to capture new business opportunities as the pandemic spread.

“Backed by its excellent track record in the industry, the support of carriers, its customs clearance capacity and extensive coverage of major air transit hubs across different regions, the Group’s air freight business, from Asia to the world, surged from March to May 2020.” The Group’s ocean freight business caught up in mid-May and June 2020 as customers replenished dwindling inventories.

In response to reduced capacity in air and ocean freight, the Group utilised its Eurasian road and rail freight network to devise alternative solutions for customers to cope with the new situation.

William Ma added: “As the world continues to claw its way to recovery from the Covid-19 pandemic, I am confident that Kerry Logistics Network, together with our customers, colleagues and shareholders, will emerge as a better and stronger company.”