The three logistics heavyweights presented outstanding half year results last week, whereby the contribution of air freight to their overall sales are brilliant. It would not be entirely surprising if Deutsche Post / DHL will announce similarly positive results on 05AUG22 when it presents its half-year figures.
K+N praises the performance of its air logistics division
The trend at all three companies is quite similar: demand for air freight services has softened in the past months while profits kept going through the roof. Take Kuehne + Nagel, for instance that reports a tonnage increase of 15.8% in H1 above prior year while turning over 6,651 billion Swiss Francs, plus 54.9% y-o-y. The world’s number one in air freight even upped its gross profit reaching 68.2 percent, which translates to 1,613 billion CHF. The company also benefitted from the purchase of APEX Logistics, whose results have been included in K+N’s results since MAY21. APEX’s impact on EBIT in 1H totaled CHF 174 million. Despite the positive figures, K+N emphasized that the business of its air logistics division was hampered by the closure of the Russian air space and the lockdowns in China, primarily Shanghai, leading to flight diversions and operational hiccups. Looking ahead K+N stated that “we expect demand for high-quality services to remain solid in the second half of 2022.”
DSV is happy with results
Over at Copenhagen, DSV’s air freight business was booming as well. Volumes grew to 813,505 tons compared to 685,517 tons in 1H, 2021, and gross profit in Q2 reached 5,052 billion Danish crowns, versus 2,897 billion in Q2 of 2021. For the first six months of the year, EBIT before special items doubled and free cash flow more than tripled compared to the same period last year. “We have now completed most of the integration of Agility’s Global Integrated Logistics business [GIL], and we can look back on a swift and successful integration, thanks to a solid effort across our organization,” commented Jens Bjørn Andersen, Group CEO, DSV. He warned however, that stormy times might be ahead. "The uncertainty in the global economy has intensified and the demand for freight services has softened in recent months. Still, large parts of global supply chains are challenged by congestion, and our focus remains on assisting and finding the right solutions for our customers." Based on the strong performance in H12022, and expectations for the remainder of the year, DSV has upgraded the full-year EBIT outlook to be in the range of DKK 23-25 billion (previously DKK 21-23 billion).
DB Schenker is Deutsche Bahn’s darling
In Berlin, DB Schenker, on the other hand, suffered a 38.8 percent drop in cargo export volumes, reaching a total of 673,300 tons. However, with a total operating profit of 1.486 billion euros in 1H (+64%), the logistics company remains being Deutsche Bahn's driving financial force. DB CEO Richard Lutz therefore also knew who to thank for the fact that the Group closed a half-year profitably for the first time in years: logistics subsidiary DB Schenker. The business unit made the largest contribution to the railway company’s current success by far. It nearly doubled its operating profit compared with the first six months of 2021. This was also praised by CFO Levin Holle who highlighted DB Schenker's performance in addition to the strong upswing in Deutsche Bahn’s core business: "The first half of 2022 was Schenker's most successful half-year in its 150-year history as a logistics company. DB Schenker played a major role in bolstering the DB's favorable performance overall."
All three half-year results mentioned above illustrate that sales rose significantly as a result of higher freight rates, particularly in air freight but also in ocean freight. This was coupled with favorable exchange rate effects.
As far as 2H is concerned, the 3 aforementioned logistics heavyweights agree that consumer demand is gradually declining, impacted by political and economic uncertainties, China’s covid related lockdowns will lead to further production disruptions, and the ongoing upheavals in the global supply chains cloud the outlook for the second half year.
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