HONG KONG SAR – Media OutReach Newswire – March 26, 2024 – Kerry Logistics Network Limited (“Kerry Logistics Network” or, together with its subsidiaries, the “Group” or “KLN Group”; stock code 0636.HK) today announced the annual results of the Group. for 2023.
Financial highlights of the Group
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Revenue* decreased 42% to HK$47,408 million (2022: HK$82,330 million)
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Core operating profit* fell 61% to HK$2,207 million (2022: HK$5,645 million)
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Core net profit* decreased 69% to HK$1,214 million (2022: HK$3,952 million)
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Profit attributable to shareholders was HK$791 million, representing a decrease of 78% (2022: HK$3,579 million).
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The Integrated Logistics (“IL”) business recorded a segment profit* of HK$1,295 million (2022: HK$1,385 million), representing a decrease of 7%.
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The International Freight Forwarding (“IFF”) business recorded a segment profit* of HK$1,394 million (2022: HK$4,721 million), representing a decrease of 70%.
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Proposed final dividend of 13 Hong Kong cents per share, payable on or about Thursday June 6, 2024.
*For continued operations only
Vic Cheung, Band Managing Director of Kerry Logistics Networksaid: “2023 has undoubtedly been a challenging year globally. Nonetheless, the global economy was in better shape than it was in 2022. For the global logistics sector, while growth stopped, freight rates and volume saw a slight rebound as the market continued to gradually normalize. Despite a challenging market, new opportunities have emerged amid changing consumer demand and reshuffling of global supply chains. KLN Group was able to turn challenges into opportunities and provided its customers with viable and cost-effective alternatives to keep their goods moving and KLN Group’s overall performance in 2023 was in line with expectations and on par with its global peers .
Segmental reports
During the period, KLN Group removed the E-commerce and Express business from its segment reporting following the transfer of companies active in express delivery services in the Asia-Pacific region and Europe to SF Holding in the third quarter 2023 and the subsequent announcement in December 2023 of deconsolidation. Kerry Express Thailand via dividend distribution.
The aim of the restructuring was to strengthen KLN Group’s strategy of focusing on its core business of integrated logistics and international freight forwarding, with the aim of improving its overall performance and prospects.
Integrated logistics
The IL division overall reported a 7% decline in segment profit, led by lower operations in Hong Kong due to lower demand for pandemic-related services and a slower-than-expected market recovery Retail. However, despite the performance of the Hong Kong business, the IL division in other markets recorded growth.
In mainland China, despite a delay in market recovery, the IL business recorded an increase of 17% following the successful execution of a series of cost management measures. IL activity in other parts of Asia recorded an increase of 11%, mainly supported by the stable performance of Kerry Siam Seaport in Thailand.
International Freight Shipping
The IFF division reported a 70% decline in segment profit in 2023 due to excess inventory, falling purchasing power and stagnant export growth, particularly in Asia. The decline in air and sea freight rates since the third quarter of 2022 compared to the historic highs of 2021, as the global logistics market normalized, led to a further contraction in the profit margin in 2023, compared to that of 2022.
Nevertheless, thanks to stabilized freight rates and a recovery in consumer demand, KLN Group achieved sustainable results on the Asia-US trade routes and remained the main player on the busiest trade lane in the world in 2023.
In 2023, the Group continued to leverage strengthened resources with SF Holding to capitalize on cross-selling and collaborations across various verticals and businesses. A joint venture has been established to manage the international cargo terminal at Ezhou Airport in central China.
Various industrial mega projects have been carried out and records have been broken by project logistics teams in mainland China, Central Asia and Europe in 2023. The segment has delivered satisfactory results and is expected to soon become one of the development drivers of the IFF division.
Vic Cheung concluded: “Global growth will likely remain weak in 2024. The Red Sea crisis brings new variables to the Group’s IFF activities. Nevertheless, we are committed to providing our customers with alternative solutions in the near term and are optimistic that our IL business in Asia will likely benefit from changes in the supply chain in the medium term. KLN Group’s agility, resilience and innovation in delivering solutions powered by its global network, strong presence in Asia and its most diverse service offerings will once again enable ”
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The issuer is solely responsible for the content of this announcement.
