Biz boost gives freight firm shot in the arm

Kuehne & Nagel International AG, the world's largest sea-freight forwarder, said first-quarter profit rose 19 percent as air and maritime shipments increased.

Net income advanced to 154 million Swiss francs ($151 million), or 1.30 francs a share, from 130 million francs, or 1.10 francs, a year earlier, the Schindellegi, Switzerland-based company said yesterday.

Growth in worldwide cross-border cargo traffic has added to earnings at Kuehne & Nagel, which arranges the transport of goods for companies such as Germany's Siemens AG. Global trade growth is expected to ease to 4.5 percent this year from a rate of 5.5 percent in 2007, the World Trade Organization said on April 17.

"Kuehne & Nagel again reported strong results," Axel Funhoff, an analyst at ING in Brussels with a "buy" recommendation on the stock, said in a note to investors.

Kuehne & Nagel fell as much as 1.10 francs, or 1 percent, to 105.90 francs in Swiss trading as of 9:40 am in Zurich.

The company is sticking to a March forecast of "clearly" outperforming the sea-freight, air-cargo and contract logistics markets this year, Chief Financial Officer Gerard van Kesteren said yesterday.

Volumes in the worldwide sea-freight market will probably increase 6 percent to 7 percent this year, down from a previous forecast of 8 percent because of slowing consumption growth, van Kesteren said. The air-freight market is expected to expand by 4 percent to 5 percent and the contract logistics market by 6 percent, he added.

The sea-freight division recorded a 10 percent increase in volumes in the first quarter compared with a year earlier. The air-freight division arranged shipments of 17 percent more cargo.

Group sales rose 9 percent to 5.31 billion francs. Gross profit, or sales minus customs duties and fees paid to third parties, rose 9.3 percent to 1.55 billion francs.

"The impact of the economic slowdown is difficult to quantify," Chief Executive Officer Klaus Herms said. "We are convinced of the resilience and stability of our business model."

The Swiss company renewed a contract in January with Munich-based Siemens, Europe's biggest engineering company, to handle shipment of goods such as turbines and spare parts for medical equipment between Europe and the United States.

Agencies

(China Daily 04/22/2008 page16)