Kuehne+Nagel beats Q1 profit forecast on cost cutting measures

Swiss logistics group Kuehne und Nagel International reported a 39 per cent drop in first quarter operating profit but beat market expectations on Tuesday, aided by cost reduction measures and streamlining of its operations. Its earnings before interest and tax were 376 million Swiss francs ($412 million) in the first three months of 2024, down from 612 million francs a year earlier. That was ahead of analysts' average forecast of 330.5 million provided by LSEG.

"Our focus on efficiency and streamlined structures allowed us to reduce costs per unit by 12 per cent in Sea Logistics and 14 per cent in Air Logistics," CEO Stefan Paul said in a statement.
Persistent supply chain issues amid the Red Sea crisis and Russia's airspace closure following its invasion of Ukraine continued to burden Kuehne+Nagel in the quarter, even as obstacles to sea shipments caused by China's COVID curbs, which had affected the year-ago quarter, eased.

Kuehne+Nagel, which operates in more than 100 countries, said the earnings decline was driven by its three key segments, with a more than 40 per cent drop in quarterly EBIT for sea and road logistics, and a 39 per cent decline in air logistics. The company did not provide an outlook for the full year.