Kuehne + Nagel saw both turnover and pre-tax profit plunge in 2023 following two years of “extraordinarily favourable” results, and against the backdrop of the Ukraine War, an economic slowdown, and rising interest rates and inflation, the company has revealed.
Reporting its latest annual results for the year to 31 December 2023, Kuehne and Nagel Limited revealed turnover almost halving to £1.1bn (2022: £2bn) with pre-tax profit plunging to £42.4m (2022: £126m).
Turnover in the international freight forwarding business fell to £939.4m (2022: £1.8bn) whilst turnover in the contract logistics division saw a gentler decline to £208.2m (2022: £227.4m).
The UK market generated the lion’s share of turnover during the year, amounting to £901.7m (2022: £1.6bn)
The Swiss-owned company, which employs around 3,700 staff in the UK, specialises in international freight forwarding in road, sea and air logistics. It also offers large scale, dedicated distribution, storage and warehousing services, with a focus on the military, government, aerospace and pharma sectors.
In its review of the business accompanying the results, the company said that it had delivered a “solid result” in light of the economic and geopolitical challenges it had faced during the year.
It added that cost reductions had been made across the business during the final quarter of 2023 “in order to adapt to the more challenging market conditions and inflation.”
Turning to the international freight forwarding division, the report said the division was particularly affected by the overcapacity of sea and air freight carriers, which saw freight rates “significantly” reduced from their post-pandemic highs.
The company’s contract logistics division also saw a fall in revenue in the year, with its reduced turnover attributed largely to a decline in Covid-19 related business.
The report added that the division’s key focus is now on strategically leveraging areas of military and government, aerospace and healthcare, and “working towards an increase in market share.”
Looking ahead the company remains upbeat with the report stating that the directors are “confident the company will remain resilient under the current economic environment.”
It added: “The directors have considered the changing market conditions, resulting in a decline in volume of freight rates. Despite this, the company is still expecting a strong overall performance in 2024 and 2025.
“The latest projections show the company is generating positive cash flows through the forecast period to the 31 December 2025.”
A request for comment from Kuehne +Nagel has yet to receive a response.
