Kerry Logistics Network Limited posted a core net profit of HK$1.18 billion (US$151 million), a year-on-year increase of 7%, according to annual results released by the company.

Total turnover increased by 28% year-on-year to HK$30.8 billion (US$3.92 million), while profit attributable to shareholders grew by 13% to HK$2.12 billion (US$270 million).

“The global economic growth has been on an upswing, riding on the recovery in investment, manufacturing and trade activities,” said William Ma, group managing director of Kerry Logistics. “The overall performance of Asia remained robust, driven by pronounced external demand and rising domestic consumption. Kerry Logistics performed better in 2017 2H when compared to 1H, buoyed by the continued strength in global e-commerce, the sound performance of APEX in the Americas, and the accelerating growth of our express business in Thailand.”

The Integrated Logistics division generated 78% of the group’s total segment profit, achieving a 12% growth in segment profit. The increase was driven by synchronized global business growth and the lucrative performance of the group’s business in Thailand.

In Hong Kong, new business and customer wins in various verticals brought continued growth to the logistics business, while Taiwan also regained positive growth in the second half of the year. The group’s business in mainland China dropped due to rising competition and costs.

The International Freight Forwarding division generated 22% of the total segment profit and experienced a 41% increase in turnover and a 14% rise in segment profit.

Despite a stable increase in cargo volume, rising freight rates in 2017 due to carrier consolidation, alliance reshuffling and capacity reduction compressed the profit margin of the IFF division.

During the year, the group added three logistics facilities in Shanghai, Wuxi and Phnom Penh to its asset portfolio, which now consists of logistics facilities measuring a total of 52 million square feet, of which 26 million square feet are self-owned.

To capitalize on the cross-border e-commerce boom, particularly between Greater China and ASEAN, Kerry plans to expand in markets such as Vietnam, Malaysia and Singapore.

“Responding to the needs of our customers and the global economy, we continuously improve our speed of response, turning it into a competitive advantage,” said George Yeo, chairman of Kerry Logistics. “We are also widening our network in order to serve and provide our customers with flexible total solutions. With the addition of Globalink Logistics and Lanzhou Pacific Logistics, we now have the strongest road and rail freight network across Eurasia. The deepening and widening of our capabilities position us well for rapidly growing cross-border e-commerce which is facilitated by better physical connectivity and greater international cooperation. As we continue to bring in catalysts to drive the scale, volume and efficiency of our global IFF network, the group is optimistic to deliver sustainable results.”