Kuehne und Nagel eyes future growth in line with market
Recasts lede with information about growth prospects, adds CEO statement in para 2-4, adds analyst comment in para 5
By Elizaveta Gladun and Anastasiia Kozlova
Oct 23 (Reuters) -Swiss logistics group Kuehne und Nagel KNIN.S reported third quarter earnings which were slightly below market expectations on Wednesday although analysts and management pointed to better times ahead.
The company pointed to a recent restructuring which management said had underpinned improved third-quarter profitability and set it up for an improved performance going forward.
While dealing with ongoing market disruptions including militant attacks in the Red Sea and Russia's airspace closing following its invasion of Ukraine, the company intends to focus on organic growth and market share gains.
"Our aim is to grow at least with the market based on the foundation we have laid in 2024," Chief Executive Officer Stefan Paul said in a call with Reuters. He cited an expectation for global trade growth of 3% to 5%.
In the backdrop of tough market conditions, Kuehne und Nagel initiated cost-cutting measures in the fourth quarter of 2023, which included reducing its workforce.
Further restructuring efforts were made in April 2024, dismantling regional management layers to increase speed and efficiency in executing the company's strategy.
"2024 created the basis for a higher yield which we have demonstrated in the Q3", Paul added, attributing this rise to the company's focus on high-yield business and cost control, which resulted in reduced cost per container unit.
Kuehne und Nagel's improved profitability was due to cost management and the effect of recent restructuring efforts, according to analysts.
"The good news is that we’ve hit the inflection point, with Q2 2024 now appearing to be the bottom," said Michael Field, an analyst from Morningstar.
In the third-quarter the group's operating profit and net turnover grew by 2% and 19% to 455 million Swiss francs ($525 million), 6.5 billion francs, respectively. Analysts had on average expected operating profit of 460 million, according to information provided by the company.
($1 = 0.8669 Swiss francs)
Reporting by Elizaveta Gladun and Anastasiia Kozlova, editing by Matt Scuffham
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