Kuehne+Nagel reported a 31% jump in its fourth quarter operating profit, but missed market expectations as its business volumes lagged the broader logistics market.
The Swiss freight forwarder, which operates in more than 100 countries, recorded a quarterly volume decline of 1% in its sea logistics business, while air logistics saw a 5% rise from a year earlier.
Volumes at both businesses were below the levels indicated by the broader market data, Bernstein analysts said in a note to clients.
'We have been waiting for the quarter when Kuehne+Nagel catches back up with its large peers, and we are still waiting, as evidenced by still-soft volume numbers vs DSV in Q4,' they added.
K+N reported earnings before interest and taxes (EBIT) of CHF 421 million (€449.08 million) for the fourth quarter of 2024, missing analysts' median estimate of CHF 430 million (€458.7 million) in a company-provided poll.
The company's shares have underperformed the wider logistic sector over the past year, falling nearly 17% as of Monday's close. They dropped another 6% in early trade on Tuesday.
Challenging Backdrop
'We continue to see the backdrop as challenging for EBIT growth in 2025 and 2026 and remain cautious,' JPMorgan analysts wrote.
Logistics companies are likely to face slower profit growth in 2025 due to yields' normalisation, softer demand and fading supply chain disruptions, Parash Jain, HSBC's global head of transport and logistics research, said ahead of the results.
With growth in global container trade and air freight tonnes expected to halve in 2025, Jain was expecting logistic firms, and particularly K+N, to address their cost control measures.
The company said it would provide a financial outlook for 2025 at its capital markets day event on 25 March. It did not mention possible cost measures in the press release.
Stefan Paul, CEO of Kuehne+Nagel International AG, added, “The streamlining of Kuehne+Nagel's organisational and sales structure in April 2024 already yielded visible successes in the second half of the year.
“In addition, we enabled new growth opportunities through acquisitions in North America and Asia. In short, we have created a more efficient organisation with a broader offering to achieve our future ambitions.”
The company has proposed an ordinary dividend of CHF 8.25 per share for the 2024 financial year, corresponding to a dividend yield of 4.0%.
Read More: Chain Reaction: How Global Trade Navigated Supply Chain Challenges In 2024
News by Reuters, additional reporting by ESM.
