Kerry Logistics recorded 13% year-on-year revenue growth in H1 2019

Kerry Logistics

Kerry Logistics has announced the Group’s results for the six months ended June 30, 2019. Group turnover increased by 13% year-on-year to HK*$19,810m (2018: HK$17,461m). Core operating profit increased by 9% to HK$1,330m (2018: HK$1,216m), and net profit dropped by 4% year-on-year to HK$669m (2018 1H: HK$700m). Profit attributable to the shareholders, including from disposal of two warehouses in Hong Kong of HK$1,958m, increased by 194% to HK$2,790m (2018: HK$948m).

Integrated Logistics

Kerry’s Integrated Logistics (‘IL’) business recorded a profit of HK$1,162m (2018: HK$1,107m), accounting for 80% of the Group’s total segment profit, and recording a year-on-year 5% growth. The segment benefitted from positive performance of its Hong Kong business, winning new customers across various industries and growing some key accounts in the fashion and food and beverage industries.

In Mainland China, Kerry’s IL focused on higher-growth verticals including pharmaceutical, imported food and beverage and automotive parts to minimise impact from global trade volatility. The company continued expansion in Taiwan, driven by Kerry Pharma and the acquisition of Science Park Logistics in January 2019 to strengthen its capability in serving high-tech customers.

In Asia, Kerry Express Thailand continued to expand its service coverage and scale, but profit grew slower. Kerry Express Thailand’s daily volume now reaches around 1m parcels, with 10,000 service points. In Asia, Kerry expects that Taiwan will remain one of the growth drivers in H2 2019.

International Freight Forwarding

International Freight Forwarding (‘IFF’) business recorded a 22% year-on-year growth to HK$288m (2018: HK$235m), on the back of the increased trade from Mainland China to Southeast Asian countries and within Asia. In H1 2019, Kerry’s IFF contributed 20% to the Group’s total segment profit. The Group said that will continue to focus on expanding its IFF business organically and through mergers and acquisitions.

William Ma, Kerry Logistics’ Managing Director, said: “International trade disputes and unresolved negotiations have slowed down the global economic growth in H1 2019, weakening trade and manufacturing. Also, turmoil in Hong Kong added pressure to the economy, and it is expected to adversely impact the Group’s performance in the second half of the year too. Global economic growth is expected to remain weak in 2020, as policy uncertainties and geopolitical tensions continue.”

Following the extension of its business into verticals such as coffee trading and distribution, and the expansion of its service in pharmaceutical and food-related cold chain, the Group said that it will keep diversifying its business capabilities in local markets to position itself for various growth. Kerry also plans to deploy resources to tap into the e-commerce growth potential of exports from Mainland China and the intra-Asia e-commerce trade.

Source: Kerry Logistics

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