Port Wings News Network:
Kerry Logistics Network Limited on 30 August 2018 announced the Group’s interim results for the six months ended 30 June 2018.
The Group’s Financial Highlights
Turnover increased by 27% to HK$17,461 million (2017 1H: HK$13,705 million)
Core operating profit increased by 19% to HK$1,216 million (2017 1H: HK$1,019 million)
Core net profit increased by 22% to HK$700 million (2017 1H: HK$576 million)
William Ma, Group Managing Director of Kerry Logistics, said, “Although the world economy experienced growth in 2018 1H, global demand has been flat. Nevertheless, the China-US trade dispute has caused manufacturing capacities to shift from Mainland China to other Asian countries, bringing about an increase in shipping volume and production activities in Asia. Southeast Asia, in particular, has enjoyed the fastest growth in the region. Leveraging the strongest network in Asia and our diversified business portfolio, the Group achieved double digit growth in turnover, core operating profit, and core net profit in 2018 1H.”
IFF Momentum Maintained
Supported by stable trade activities, the IFF division maintained growth in volume in 2018 1H, particularly in the North American and Indian Peninsula regions, resulting in a 6% increase in segment profit. Nevertheless, both profit and profit margin contributed by the IFF division have contracted as a result of the drop in performance in Mainland China.
Adhering to its long-term IFF strategy to expand its coverage worldwide, the Group acquired the Johannesburg-based Shipping and Airfreight Services (Pty) Ltd in May 2018 to expand its service offerings in South Africa.
In June 2018, the Group strengthened its project logistics capabilities through the acquisition of a majority stake in the Milan-based Saga Italia S.p.A., which is specialised in project logistics, heavy lift services, and material management. In the same month, the Group deepened its rail and road freight capabilities by launching new cross-border rail and trucking services from Mainland China through Kazakhstan to Caucasus and Turkey, so as to capture the growing trades in new markets and Europe.
The Group also established new subsidiary Kerry Freight Pakistan (Private) Limited to extend its foothold in Pakistan and leverage its first mover advantage along the China-Pakistan Economic Corridor.
George Yeo, Chairman of Kerry Logistics, concluded, “The ongoing trade spat between Mainland China and the US is reshaping trade routes and global supply chains. While the trade volume between the two economies is expected to reduce in the near future, certain markets in Asia are likely to benefit conversely from the increased intra-Asia trade as customers look for alternative supply sources beyond Mainland China and the US. Moreover, Asia has been experiencing the fastest trade volume growth for both imports and exports driven by rising domestic consumption and increased investment. We expect our Asian business to continue to grow and contribute to a major part of the Group’s profit in three to five years’ time. Leveraging our expanding global network and solid coverage particularly in South and Southeast Asia, we are optimistic to maintain growth in the remainder of the year through exploiting new business opportunities and promising prospects in Asia and new markets along the Belt and Road trade paths.”