The results show a 27% growth in turnover and a 19% increase in core operating profit. Kerry Logistics’ performance was driven by intra-Asian trade which increased due to the China-US trade dispute, but also through acquisitions in Europe and South Africa.
William Ma, Group Managing Director of Kerry Logistics, said: “Although the world economy experienced growth in 2018 1H, global demand has been flat.
“Nevertheless, the China-US trade dispute has caused manufacturing capacities to shift from Mainland China to other Asian countries, bringing about an increase in shipping volume and production activities in Asia. Southeast Asia, in particular, has enjoyed the fastest growth in the region. Leveraging the strongest network in Asia and our diversified business portfolio, the Group achieved double digit growth in turnover, core operating profit, and core net profit in 2018 1H.”
The Group’s Financial Highlights
- Turnover increased by 27% to HK$17,461 million (2017 1H: HK$13,705 million)
- Core operating profit increased by 19% to HK$1,216 million (2017 1H: HK$1,019 million)
- Core net profit increased by 22% to HK$700 million (2017 1H: HK$576 million)
- Profit attributable to the Shareholders increased by 20% to HK$948 million (2017 1H: HK$788 million)
- Integrated Logistics (‘IL’) business recorded a segment profit of HK$1,107 million (2017 1H: HK$884 million) and International Freight Forwarding (‘IFF’) business recorded HK$235 million (2017 1H: HK$222 million), which represent an increase of 25% and 6%, respectively
- Interim dividend of 9 HK cents per Share, together with a special dividend of 12 HK cents per Share, totalling 21 HK cents per Share, to be payable on Friday, 5 October, 2018.
While strategically strengthening its asset portfolio, the Group also considered different options to unleash the value of its current portfolio. In Mainland China, the Group disposed of the underperforming Kerry Chengdu Logistics Centre, in Shuangliu County, Chengdu in May 2018. In July 2018, the Group disposed of a 17% interest in Kerry Express Thailand to VGI.
George Yeo, Chairman of Kerry Logistics, concluded, “The ongoing trade spat between Mainland China and the US is reshaping trade routes and global supply chains. While the trade volume between the two economies is expected to reduce in the near future, certain markets in Asia are likely to benefit conversely from the increased intra-Asia trade as customers look for alternative supply sources beyond Mainland China and the US. Moreover, Asia has been experiencing the fastest trade volume growth for both imports and exports driven by rising domestic consumption and increased investment.
We expect our Asian business to continue to grow and contribute to a major part of the Group’s profit in three to five years’ time. Leveraging our expanding global network and solid coverage particularly in South and Southeast Asia, we are optimistic to maintain growth in the remainder of the year through exploiting new business opportunities and promising prospects in Asia and new markets along the Belt and Road trade paths.”