Kerry Logistics looks ahead to SF deal as revenues rise
25 / 03 / 2021
By Damian Brett
Kerry Logistics saw both adjusted profits and revenues increase last year and it is expecting its proposed deal with SF Holdings to drive further growth.
The Hong Kong headquartered company saw revenues increase by 30% year on year to HK$53.4bn in 2020, while profit attributable to shareholders stood was down 23.6% to HK2.9bn.
However, in 2019 profits benefited from the sale of two warehouses and with this stripped out of the results, the company would have recorded an increase of 58%.
The company said its International Freight Forwarding (IFF) business was the “powerhouse” behind the results, with segment profits increasing by 64% to HK$1bn and revenues rising 48% to HK$32.1bn.
“The growth was mainly driven by a high global demand for pandemic-related goods as well as production and exports from Mainland China,” the company said.
“It created the favourable conditions for the Group to capture opportunities from the unprecedented volatile global freight market, in terms of rates, capacity and equipment availability.”
Its International Logistics (IL) division registered a 9% increase in revenues to HK$21.3bn as consumer and e-commerce demand rose.
Earlier this year, the company announced that SF Holdings, which own Chinese express giant SF Express, plans to take a 51% stake in the company in a deal valued at around $2.3bn.
Kerry Logistics Network group managing director William Ma said: “Scale and technological advances are crucial for any company in this industry to retain its competitiveness over its peers and drive changes in the global logistics arena.
“To this end, the proposed strategic cooperation with SF Holding will scale up KLN Group, extending its reach and enhancing its R&D capabilities.
“The Group’s performance in 2020 stands as testament to the capability in devising creative and efficient logistics solutions, which were in high demand when the global supply and logistics infrastructure suffered damage. KLN Group is prepared to seize any opportunity that may arise, as well as to enhance its value for stakeholders.”
The deal will give Kerry Logistics access to SF’s network in China, while the express firm will gain through a greater international and regional presence, helping it to expand beyond China.
At the time the deal was announced, the companies said that Kerry Logistics Network will be positioned as SF Holding’s platform for international business.
They will also collaborate with each other in Greater China to better align their respective businesses.