Kerry Logistics Network maintains growth in revenue and core net profit

March 30, 2023

By Transport Intelligence

Kerry Logistics Network Limited announced the Group’s annual results for 2022.

Group’s Financial Highlights

• Revenue increased by 10% to HK$86,649m (2021: HK$78,955m*)
• Core operating profit dropped by 12% to HK$4,790m (2021: HK$5,441m*)
• Core net profit increased by 11% to HK$3,572m (2021: HK$3,220m*)
• Profit attributable to the Shareholders was HK$3,579m, which represents a growth of 8% (2021: HK$3,309m*). Year-on-year drop is 55% if profit from discontinued operations in 2021 is also included
• Integrated Logistics (‘IL’) business recorded a segment profit of HK$1,375m (2021: HK$1,073m*), which represents an increase of 28%
• E-commerce and Express (‘E&E’) business recorded a segment loss of HK$826m (2021: profit of HK$41m)
• International Freight Forwarding (‘IFF’) business recorded a segment profit of HK$4,703m (2021: HK$4,825m*), which represents a slight drop of 3%
• Proposed final dividend of 38 HK cents per Share to be payable on or around Thursday, 8 June 2023

* Excluding discontinued operations

“2022 was a turbulent year. For the logistics industry, it was a pendulum swinging from one extreme to the other with severe supply-demand fluctuations. Inflation, rising interest rates, overstocking alongside consumers’ shift in spending patterns and overcapacity, all led to a sharp drop in the global product demand and purchase orders in 2022 2H. Despite a tough 2022, KLN Group recorded a revenue of HK$86.6bn and a core net profit of HK$3.6bn in its continuing operations riding on its unparalleled network in Asia, diversified global service offerings and cross-selling synergies with S.F. Holding in various arenas”, said William MA, Group Managing Director of Kerry Logistics Network.

Integrated Logistics

The segment profit of the Integrated Logistics (IL) division recorded a 28% growth, supported by the increase in demand for pandemic-related services in Hong Kong and the rebound of production activities in Asia. Following the subsequent reopening of the Mainland of China, the IL segment is expected to maintain its growth momentum in 2023 riding on a rebound in retail sales and household consumption.

E-commerce and Express

The E-commerce and Express (E&E) division registered a drastic decline in its segment profit due to the intense competition Kerry Express Thailand faced in 2022. A series of restructuring and lean programmes have been launched to improve profitability, and the loss is expected to narrow in 2023.

International Freight Forwarding

Despite a highly volatile market, the International Freight Forwarding (IFF) division reported only a 3% drop in segment profit in 2022. Asia exports plunged in 2022 2H as global demand for finished products and purchase orders started falling. With a swift increase in ocean and air freight capacity, freight rates tumbled from unprecedented highs within a short period, putting the global freight forwarding sector under tremendous pressure. 

Extraordinary events and world affairs continued to reshape the global supply chains. As a result, higher freight capacity and low cargo volume were spread across countries, posing increasing challenges to the freight forwarding industry. Nonetheless, the IFF business maintained its profit margin at a similar level as the previous year and will continue actively looking for new business opportunities.

Integration With S.F. Holding

The business integration and development between Kerry Logistics Network Group and S.F. Holding is progressing smoothly and successfully, strengthening KLN Group’s IL, IFF and express service capabilities, particularly those within Asia. 

To enhance KLN Group’s air freight capacity and last-mile delivery capabilities, KLN Group is expanding its own-controlled air freight network and seeking new business potentials with S.F Holdings by developing new products, services and trade routes. In addition, KLN Group’s cross-border express network in Southeast Asia has also gained ground. 

Source: Kerry Logistics