Kerry Logistics anticipates that its international freight forwarding (IFF) business will maintain its growth momentum in the second half of the year, driven by sustained demand, higher ocean freight yields, and strong air freight peak season results.

The Hong Kong-headquartered global 3PL company made the comment after reporting double-digit revenue growth in the first half of 2024.

 [Source: Kerry Logistics]

For the January to June period, Kerry Logistics, together with its subsidiaries, said revenue grew by 10% year-on-year to HK$25,432 million (US$3.26 million) from the HK$23,197 million recorded during the comparable period in 2023. Core net profit also increased by 5% year-on-year to HK$606 million from HK$575 million in the first half of last year.

Kerry Logistics said its Integrated Logistics (IL) business recorded a profit of HK$693 million, a slight drop of 3% from HK$718 million during the same six-month period in 2023.

Meanwhile, its International Freight Forwarding (IFF) business recorded a segment profit of HK$740 million, up 18% from HK$626 million in the January to June period of 2023.

"In 2024 1H, against intensifying geopolitical turmoil and persistently high interest rates, inflation moderated to a three-year low, and the global economy returned to growth after three years of slowing," said Vic Cheung, chief executive officer and executive director of Kerry Logistics Network.

He noted that an array of factors pushed ocean and air freight rates up in the latter part of the second quarter.

"Supported by its resilience and agility in providing flexible and cost-effective solutions to customers, KLN Group was able to ride the waves in this highly volatile market and recorded a 10% year-on-year growth in revenue and 5% growth in core net profit for its continuing operations 2024 1H, outperforming its international peers," Cheung said.

Integrated Logistics

The Group’s IL business experienced a short-term contraction in the first half of 2024, reporting a 3% drop in segment profit due to the business decline in key markets, Hong Kong and the Mainland of China, amid sluggish economic recovery and prolonged weakness in domestic demand.

The Hong Kong business recorded an 11% drop in segment profit due to changes in the consumption patterns of visitors and local citizens, which led to subdued local spending, particularly in the F&B sector.

Kerry noted that the decrease compared to the previous year was also due to the impact of certain pandemic-related government grants in 2023.

In Mainland China, the IL business recorded a 5% drop as stagnant global demand dampened manufacturing activity alongside falling retail consumption amid economic uncertainties.

The IL business in the rest of Asia registered a 9% growth, riding on the growth in Singapore, Vietnam, the Philippines and India and the stable performance of Kerry Siam Seaport in Thailand.

International Freight Forwarding

The Group's IFF business recorded an 18% growth in 2024 1H, supported by the growth in key markets, including the US, Mainland China and Hong Kong.

Kerry Logistics said the air freight business under the IFF division recorded steady volume growth during the traditional slack season, thanks to upswings in cross-border e-commerce.

Positive results were also brought by the integration and collaborations with S.F. Holding including cross-selling and the joint venture formed to manage the international cargo terminal of the Ezhou Airport in Central China.

"Despite the turbulence in the global freight market and the uncertainties of economic revival, we are optimistic about improvements in our performance for FY2024," Cheung said.

"Performance in the IFF division is expected to grow in 2024 2H riding on sustained demand, stable volume growth and higher yields in ocean freight as well as the anticipated strong results of the air freight peak season in 2024 Q4."

The Kerry Logistics chief executive noted that with the company's expansive network in Asia, its diversified global solutions and a broad customer portfolio, the Group is committed to capturing market opportunities wherever they might arise through prompt action amid a stormy logistics landscape.