Kerry Logistics posts strong H1, backed by airfreight and e-commerce
The third-party logistics provider recorded a first-half net profit of HK$845 million, up 26 percent from the same period last year.
August 28, 2020
By PLA Editor
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Kerry Logistics’ net profit jumped 26 percent to HK$845 million (US$109 million) in the first six months, compared to the same period last year, despite experiencing a downturn in its warehouse business due to Covid-19.
A shortfall in total logistics revenue was attributed to operating fewer warehouses in Hong Kong.
As widespread lockdowns resulted to a drop in demand for non-essential products, the Hong Kong-based logistics provider said warehouse operations in Asia have been severely impacted.
This prompted Kerry Logistics to switch focus from serving general consumption and regional distribution centres to fulfilling pandemic-related and other essential supplies in Hong Kong.
However, strong demand in last-mile fulfilment and e-commerce logistics kept its logistics business solid, with Hong Kong (13 percent), Taiwan (11 percent) and the rest of Asia (6 percent) posting revenue uptick year on year.
China saw the only notable decline in logistics revenue with a 37 percent fall, but the company remains optimistic on its full-year results after activity picked up in April.
Kerry Logistics attributed its strong financial performance in the first half to its freight forwarding business which surged 40 percent year on year.
The company said its air freight business saw volumes surge from March to May, whilst ocean freight followed suit in mid-May and June as customers replenished their inventories.
The 3PL provider noted the positive performance of Apex, acquired in March, against the contraction seen by other players in the market.
Kerry Logistics’ completed investment in a private express company in May, meanwhile, underscores its efforts in boosting last-mile and e-commerce logistics capabilities.
As part of its continued reorganising in Asia, the logistics provider completed the disposal of its Adelaide warehouse operation; entered into a divestment agreement of Singapore-based Kerry-ITS Group; and received the notice of acceptance for the proposed spin-off and listing for Kerry Express Thailand.