K+N net profit up 9.1%

The Kuehne+Nagel Group delivered its best results in 2008 despite the economic downturn and a negative currency impact. Turnover increased by 3.0 percent to CHF 21,599 million. The operational result (EBITDA) remained stable at CHF 1,020 million. Net earnings grew by 9.1 percent to CHF 585 million.

For the 2008 business year, the Board of Directors will propose a 21 percent dividend increase.

Reinhard Lange, Chief Executive Officer of Kuehne+Nagel International AG, said ?he economic slowdown, which accelerated in terms of scope and pace in the last quarter, severely affected the logistics industry.

Thanks to the stable development of our business in the first nine months and the early adaptation of rigorous cost controls, we were able to soften the impact of reduced volumes, while improving results compared with the previous year.

Seafreight volumes increased by 2 percent to a total of 2,670 million containers (TEU) shipped. Contrary to market trends, Kuehne+Nagel significantly increased export volumes in the trade lanes from Asia to North and South America and to the Middle East, extending its market share. However, cargo volumes declined in line with market developments in the main Asia-to-Europe and Europe-to-North America trade lanes.

The operational result improved by 7.3 percent due to the ability to provide value-added supply chain management services, cost efficiency as well as a positive performance in niche segments. The EBITDA margin increased from 4.4 to 4.6 percent.

International airfreight was heavily affected by the economic downturn, with December 2008 registering the biggest ever decline in traffic volumes. Although this development had an impact on Kuehne+Nagel airfreight activities, nevertheless, in 2008 the company increased cargo volumes by 2.1 percent.

EBITDA improved slightly (+0.9 percent) and the EBITDA margin remained at a high level (5.7 percent / 2007: 5.9 percent) as a result of strict cost management and intensified marketing of value-added airfreight solutions.

Kuehne+Nagel? industry-focused contract logistics solutions are well accepted by customers worldwide. Despite adverse exchange rates, turnover was sustained at the previous year? high level, further consolidating the market position. Falling demand from a number of large customers in the United States, Canada and Great Britain, however, resulted in reduced capacity utilization and increased margin pressure. In addition, start-up costs in some Eastern European countries negatively affected the operational result, which was 12.2 percent lower than in the previous year.

EBITDA margin was at 4.6 percent (2007: 5.3 percent). A new production system and better management tools are being implemented to increase productivity and better adapt costs to volume fluctuations. <Korea Shipping Gazette>