Kerry Logistics profit up 15pc to US$310.8 million, as sales soar 24pc
HONG KONG's Kerry Logistics Network's 2018 profit attributed to shareholders increased 15 per cent year on year to HK$2
HONG KONG's Kerry Logistics Network's 2018 profit attributed to shareholders increased 15 per cent year on year to HK$2.44 billion (US$310.8 million), drawn on revenues of HK$38.1 billion, up 24 per cent.
Core operating profit in 2018 rose 11 per cent to HK$2.36 billion while core net profit climbed 12 per cent year on year to HK$1.32 billion (2017: HK$1,183 million)
Kerry's international forwarding segment posted a seven per cent profit increase to HK$549 million.
Potential gain of HK$2 billion estimated from the disposal of two warehouses in Hong Kong by the group, is still subject to independent shareholders' approval and certain conditions for completion.
'Global economic growth moderated in 2018. The US-instigated trade tension with mainland China, reverberated far and wide, casting uncertainties over the global trade landscape,' said Kerry managing director William Ma.
'In contrast, the economic growth in emerging Asia, specifically in the Southeast Asian countries, continued its strong momentum. With an unparalleled network in Asia, Kerry Logistics is well-positioned to capitalise on the robust growth in the region.
'Increasing demand in intra-Asia trade and e-commerce business accelerated the group's integrated logistics businesses. We recorded a double-digit increase in turnover, core operating profit, and core net profit in 2018, achieving positive growth for the ninth consecutive year.
Fuelled by the increased earnings from the Hong Kong logistics operations and the outstanding performances of Kerry Express Thailand as well as Kerry Siam Seaport in Thailand, the integrated logistics division registered a 14 per cent rise in segment profit in 2018, generating 79 per cent of the group's total segment profit. The integrated logistics business is set to remain the main earnings driver in 2019, he said.
In Hong Kong, underpinned by the group's leading market position in addition to its strategy to strengthen its expertise in target verticals and deepen its penetration therein, the segment profit of the logistics operations climbed by 37 per cent in 2018. Together with the moderate growth of the warehousing business, the group's Hong Kong business accounted for 41 per cent of segment profit for the integrated logistics division.
'In mainland China, the segment profit of the integrated logistics business recorded a 12 per cent drop in 2018. The China-US trade dispute had significant impact on Chinese export trade in the second half. Customers slowed down their investment and expansion plans which were set out in the second half, resulting in lower-than-expected growth,' said Mr Ma.
In Taiwan, as the impact of the labour law passed in 2016 has been cushioned by internal operation adjustments and improved operation efficiency, the group's integrated logistics business stabilised with segment profit growth of four per cent in 2018.
In Asia, supported by the strong performance of the group's business in Thailand through Kerry Express Thailand and Kerry Siam Seaport, the integrated logistics segment profit experienced a 37 per cent increase in 2018.
Said chairman George Yeo: 'Despite uncertainties, Kerry Logistics did well in 2018 achieving double-digit growth. Looking ahead, we see three major trends affecting global logistics: First, China's market become the biggest in the world. Second, strategic rivalry between China and the US will continue for years and disrupt existing global supply chains. Third, technology is steadily disrupting all aspects of the logistics industry.'