Kerry Logistics recorded revenue growth of 27% in H1 2018 on the back of “booming intra-Asia trade & e-commerce”.
Core operating profit and net profit were up by 19% and 22% respectively.
The Integrated Logistics (IL) division noted revenue growth of 34%, while International Freight Forwarding (IFF) saw growth of 22%.
By geography, growth was as follows: Hong Kong (+27%), Mainland China (+24%), Taiwan (+16%), Rest of Asia (+59%) Americas (+4%), Europe (+34%) and Other (+2%).
Rest of Asia was boosted by strong intra-Asia trade and increased shipping volumes resulting from the ongoing China-US trade spat.
Overall, the core dynamics that impacted freight forwarding performance were accelerating intra-Asia trade, China-US trade tensions, increasing business volume and production activities in South East Asia and surging assembling activities in Taiwan shifting from China.
As for China specifically, Kerry asserts that “manufacturing capacities have been shifting out from China” and that “the situation will continue for the coming two years”. It noted that domestic consumption is the core business driver, with the country transforming from an “export base” to an “import base”. Kerry also asserted that the Chinese transportation sector is characterised by “over competition”, with mitigating measures to improve performance being a focus on import and domestic consumption and an expansion of project logistics services.
William Ma, Group Managing Director of Kerry Logistics, stated: “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.”
Source: Kerry Logistics
