Kuehne & Nagel (K&N) has reported on an opening three months of 2012 that it says were hit by cost increases, lower margins in its forwarding business and an antitrust fine from the European Commission in the airfreight division.
These factors combined to offset further volume growth and led to what the group called an 'unsatisfactory result' for the first quarter, with net earnings falling to CHF133m from CHF155m (€129m) in the same period of 2011 – although this figure dropped further to CHF68m (€56m) when the one-off antitrust fine of CHF65m (€54m) was considered.
'In the first quarter of 2012 we had to cope with a number of adverse factors,' said Reinhard Lange, chief executive of K&N International. 'Our investments in growth initiatives resulted in considerable cost increases. We will counteract this trend with strict cost control and measures to improve productivity.
'Furthermore, profit margins declined in seafreight and airfreight,' he added. 'In addition, there are one-off charges due to a high antitrust fine, which was reported on 28 March 2012. Nevertheless, we achieved growth above market average.'
Turnover remained stable at CHF4.8bn (€4bn), while the group's operational result (EBITDA) declined by 12.4 per cent to CHF218m (€181m), including the antitrust fine.
'As a consequence of the experience made in the first quarter of 2012, we have intensified our cost management,' Lange added. 'We are confident that the measures implemented as well as solid growth will contribute to an improvement of results in the second half of the year.'
