Kuehne & Nagel International AG’s third-quarter operating profit rose 9 percent as the freight forwarder shifted to more lucrative U.S. sea-cargo markets, prompting the company to strengthen its profitability target for 2015. The stock rose to a five-month high.
Earnings before interest and taxes increased to 230 million Swiss francs ($239 million) from 211 million francs a year earlier, Schindellegi, Switzerland-based Kuehne & Nagel said Tuesday. Profit beat the 221.2 million-franc average of five analyst estimates compiled by Bloomberg. Nine-month Ebit amounted to 5.2 percent of revenue, and the company said it may exceed a full-year goal of 5 percent for the margin.
Kuehne & Nagel has shifted its ocean-freight unit’s focus to the U.S. import market and away from Asian exports as China’s international trade weakened amid an economic slowdown. Margins per container shipped by sea increased in the first nine months of the year as Kuehne dropped less-profitable contracts, while earnings at the air-freight division also improved as the company offered more services to manufacturers such as carmakers and drug producers.
5% Jump
Kuehne & Nagel jumped as much as 5 percent to 139.40 euros, the highest intraday price since May 5, and was trading up 2.6 percent as of 3:56 p.m. in Zurich.
Air-freight volume handled by Kuehne & Nagel in the first nine months rose 5.1 percent. While sea freight volume declined 1.1 percent, gross profit per container increased 4.4 percent. The unit generated operating profit of 131 million francs in the third quarter, a gain of 17 percent. Both air and sea freight volumes will rise in the fourth quarter, Chief Executive Officer Detlef Trefzger said on a call with analysts.
Sea-Freight Forecast
Kuehne reduced its full-year forecast for global sea-freight volume in April to growth of 3 percent to 4 percent, predicting its own cargo handling will be in line with market developments. The company has declined to reiterate that forecast since then because of volatility of rates and volumes.
Kuehne remains open to further deals after the 221 million franc acquisition in June of Re Transportation Inc., a U.S. trucking company, Trefzger said. Rather than “large bolt-on” transactions, deals should add individual specialties that the company currently lacks, he said.
Exchange-rate shifts cut nine-month operating profit by 7.9 percent, Kuehne & Nagel said. The Swiss National Bank abandoned a cap on the franc’s value against the euro in January, causing the country’s currency to surge.
