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Supply Chain

Kuehne+Nagel Profit Falls Yet Beats Forecasts, In 'Challenging' Markets

By Steve Wynne-Jones
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Kuehne+Nagel Profit Falls Yet Beats Forecasts, In 'Challenging' Markets

Freight forwarder Kuehne+Nagel's operating profit fell 45% in the first quarter, but exceeded forecasts, the company said, as markets and supply chains recovered from pandemic-related disruptions.

Falling global consumer demand, soaring inflation and high inventories have dragged freight rates down from pandemic heights, denting earnings of Switzerland's Kuehne+Nagel and Denmark's DSV.

Operating Profit Declines

Kuehne+Nagel's operating profit fell to CHF 612 million (€621.7 million) in the quarter. This exceeded market consensus by 19%, Bernstein analyst Alex Irving said.

"Sea Logistics was the standout performer," Irving wrote in a note to clients, adding that the group's biggest division beat operating profit estimates by 42%.

"Air was softer, clearly going through a soft patch as supply chain normalisation progresses and less air is needed to circumvent ocean disruption," Irving added.

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'Holding Its Own'

Chief executive Stefan Paul said the macroeconomic situation remained "extremely challenging" but Kuehne+Nagel managed to "hold its own in this environment and expand its market share worldwide".

Kuehne+Nagel, which operates in more than 100 countries, said that compared to its pre-pandemic performance and in the context of a normalised business environment, the quarterly figures represented a "record result".

Earlier this week, DSV, the world's third-largest freight forwarder, predicted a recovery in global trade volumes after the firm surpassed profit forecasts in the first quarter despite seeing lower volumes and freight rates.

Read More: Danish Logistics Firm DSV Eyes Recovery In Global Trade Volumes

News by Reuters, edited by ESM – your source for the latest supply chain news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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