Swiss logistics group Kuehne+Nagel has reported a 51% drop in second-quarter operating profit, as industry conditions deteriorated due to a challenging economic environment.
Earnings before interest and tax (EBIT) came in at CHF 523 million (€543.8 million) in the second quarter of 2023, down from CHF 1.07 billion (€1.11 billion) a year earlier.
The pandemic-related special economic situation in 2021 and 2022 continued to distort year-on-year comparisons in the second quarter, the company said in a statement.
Falling global consumer demand, soaring inflation and high inventories have dragged freight rates down from their pandemic heights, denting earnings of freight forwarders such as Kuehne+Nagel and Denmark's DSV.
Net turnover for sea logistics in the second quarter came in at CHF 2.19 billion (€2.28 billion), down 56% from a year earlier, the company said.
In the first six months of 2023, sea logistics container volume reached 2.1 million TEU. Despite an overall market decline of approximately 5%, Kuehne+Nagel Sea Logistics managed to increase its market share, it said.
"Kuehne+Nagel coped well with the transition from the exceptional economic situation shaped by the pandemic," commented Stefan Paul, chief executive. "In a weakened economic environment, Sea and Contract Logistics gained market share and kept earnings stable. In contrast, volumes in Air Logistics declined broadly in line with the market.
"While our ongoing cost control efforts became more visible in the second quarter of 2023, our strategic path is unchanged with a focus on high-quality logistics services and an extraordinary customer orientation."
Kuehne+Nagel boasts a workforce of over 79,000 employees at almost 1,300 sites in close to 100 countries.
Additional reporting by ESM