Kuehne & Nagel posts results for Q1 09
Kuehne & Nagel is preparing further cost cutting measures as a “severe recession-related decline” in sea and air freight volumes resulted in a 17 percent fall in first quarter net earnings.
The Swiss logistics giant booked net income of $86 million compared with $133 million in the first three months of 2008.
But gross profit, a key indicator of earnings after deducting freight rates, customs and security surcharges, retreated by just over seven percent to $1.24 billion from $1.34 billion a year ago.
CEO Reinhard Lange said cost cuts introduced at an early stage across the company’s worldwide network in response to the global economic downturn had produced a “solid performance” in the first quarter.
“Since it remains impossible to predict … when the global economy will recover, we will adhere to our dual strategy of rigorous cost control with a commitment to market share expansion,” Lange said.
The group, which has already cut its 54,000 strong workforce by six percent since October, is expected to shed more jobs as it aligns its payroll with shrunken transport and contract logistics markets.
Ocean freight volume fell 13 percent in the quarter, but the company which handled 2.67 million TEUs in 2008, said it increased its market share in March. Cost cuts limited the decline in earnings to 4.7 percent, and 2.6 percent currency adjusted.
Air freight volume fell 17.9 percent but “substantial new business was generated.” Earnings declined 10.3 percent, and 6.6 percent adjusted for currency movements.
Trucking volumes also weakened, especially in the core German market where traffic plunged 20 percent in the first two months of the year. This outweighed the impact of cost cuts and improved capacity utilization to leave earnings 45 percent down from the first quarter of 2008.
Contract logistics margins came under strong pressure in the first quarter amid falling customer volumes, prompting the company to cut jobs to counteract high fixed costs and insufficient warehouse utilization.
The Swiss logistics giant booked net income of $86 million compared with $133 million in the first three months of 2008.
But gross profit, a key indicator of earnings after deducting freight rates, customs and security surcharges, retreated by just over seven percent to $1.24 billion from $1.34 billion a year ago.
CEO Reinhard Lange said cost cuts introduced at an early stage across the company’s worldwide network in response to the global economic downturn had produced a “solid performance” in the first quarter.
“Since it remains impossible to predict … when the global economy will recover, we will adhere to our dual strategy of rigorous cost control with a commitment to market share expansion,” Lange said.
The group, which has already cut its 54,000 strong workforce by six percent since October, is expected to shed more jobs as it aligns its payroll with shrunken transport and contract logistics markets.
Ocean freight volume fell 13 percent in the quarter, but the company which handled 2.67 million TEUs in 2008, said it increased its market share in March. Cost cuts limited the decline in earnings to 4.7 percent, and 2.6 percent currency adjusted.
Air freight volume fell 17.9 percent but “substantial new business was generated.” Earnings declined 10.3 percent, and 6.6 percent adjusted for currency movements.
Trucking volumes also weakened, especially in the core German market where traffic plunged 20 percent in the first two months of the year. This outweighed the impact of cost cuts and improved capacity utilization to leave earnings 45 percent down from the first quarter of 2008.
Contract logistics margins came under strong pressure in the first quarter amid falling customer volumes, prompting the company to cut jobs to counteract high fixed costs and insufficient warehouse utilization.