Corona Virus interferes with K+N's acquisition of Asia market

Kuehne + Nagel is actively targeting growth in Asia and CEO Detlef Trefzger believes that the region will remain the center of global economic development despite the negative effects of the epidemic Corona virus 2019 (COVID-19) in the aviation and maritime markets.

K+N: Virus Corona gây cản trở quá trình thâu tóm thị trường Châu Á

When announcing the company's 2019 business results during a conference call on Thursday with analysts, Trefzger stated that the company has the size and financial resources to accelerate its network development. its Asian network through both self-growth and through M&A.

He told investors: “The Asian market is very lucrative and we are very interested in that area. We have sufficient facilities and are still mobilizing resources to accomplish this. We are considering expanding our air and sea transportation network with a partner in the Asia-Pacific region, and are promoting the business widely in the next 12 to 14 months. ”

Trefzger is still confident about business growth this year despite the impact of COVID-19, and it is expected in the second quarter, the company will try to build stocks from customers. "We will recover by the end of March, or at 90%," he said.

A quarter with more optimistic results

Trefzger is in an optimistic mood after Kuehne + Nagel announced better results in 2019. Sales increased 1.5% to 21.7 billion USD, while gross profit increased 3.5% to 8.2 billion USD. The first increase of 7.5% of interest income before tax and tax (EBIT) exceeded USD 1 billion and the company's net profit increased by 3.6% to USD 823 million compared to 2018.

But the company's two largest segments, sea freight and air freight, brought very different results in 2019. Kuehne + Nagel handled 171,000 TEUs more than the previous year, an increase of 3, 6% to 4.9 million TEU, holding the position as the world's largest freight forwarding company. This helped increase shipping revenue by 4.6% to $ 7.3 billion and its EBIT increased by 9.1% to $ 456 million.

In contrast, the air transport segment, of which Kuehne + Nagel is the second largest forwarder in the world after DHL, last year revenue fell 4.5% to $ 4.8 billion after falling 5.7%. in volume from the previous year, to 1.6 million tons, and EBIT decreased by 7.3% to 338 million.

Trefzger says the company's strategy to focus on profitable business, customer service, cost cutting, and digitization continues to be successful.

He said: “We try to keep a stable result while the air transport business context is unstable. In the "contract logistics" segment (complex logistics service package), the restructuring of the product portfolio, customers and real estate has led to a significant improvement in results. "

Towards the goal of growth in the East

The focus of Asia-Pacific business development is the top revenue segment and attracts much attention from analysts. Kuehne + Nagel merged two Asian operations last year, which Trefzger said was to strengthen the management structure and prepare for upcoming acquisitions. Refusing to identify any upcoming acquisition targets, Trefzger said Kuehne + Nagel is in serious negotiations with customers in the target markets.

He said Kuehne + Nagel is considering Chinese companies with the potential to expand and become a global company, but he added that he will not make any acquisition within next two or three months.

"We have been in China for nearly 60 years and we want to do more business with Asian customers, both in Asia and globally," he said.

Joerg Wolle, chairman of the board of Kuehne + Nagel International, said in a sales report that the company had improved its results annually for six consecutive years. "With the current state of the global economy, it is impossible to say for sure," he said.

Phaata (Source: JOC)

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