2022-03-30 Hong Kong
Kerry Logistics Network Limited (‘Kerry Logistics Network’ or together with its subsidiaries, the ‘Group’ or ‘KLN Group’; Stock Code 0636.HK) today announced the Group’s annual results for 2021.
Group’s Financial Highlights
- Revenue (including revenue generated from discontinued operations) increased by 53% to HK$81,771 million (2020: HK$53,361 million)
- Core operating profit increased by 88% to HK$6,229 million (2020: HK$3,320 million)
- Core net profit increased by 102% to HK$3,692 million (2020: HK$1,828 million)
- Profit attributable to the Shareholders was HK$7,939 million (2020: HK$2,896 million), which represents a year-on-year growth of 174%
- Integrated Logistics (IL) business recorded a segment profit of HK$1,868 million (2020: HK$2,642 million), which represents a decrease of 29%, partly due to the disposal of the Group’s Hong Kong Warehouse and the Taiwan businesses during the year
- International Freight Forwarding (IFF) business recorded a segment profit of HK$4,860 million (2020: HK$993 million), which represents a growth of 389%
- Proposed final dividend of 50 HK cents per Share, to be payable on Wednesday, 8 June 2022
William MA, Group Managing Director of Kerry Logistics Network, said, “In 2021, supply and demand mismatch, logistics bottlenecks, congested ports, labour shortage and pandemic related lockdowns and measures continued to cause endless disruptions in the global supply chain. Thanks to the unwavering support from our colleagues and partners, we managed to deliver efficient and consistent services to our customers in the face of complex and relentless challenges. We achieved a record-high revenue of HK$81.8 billion and a core net profit of HK$ 3.7 billion in 2021.”
The segment profit of KLN Group’s IL business did not grow in line with the other segment, mainly due to a weak Asian market brought about by a series of prolonged lockdowns and other pandemic measures across Southeast Asia, severely disrupting both manufacturing and consumption related activities, as well as the required disposal of the Group’s Hong Kong Warehouse and businesses in Taiwan.
In Hong Kong, the Group’s IL business reported a 14% contraction, with logistics operations decreasing by 4%. This was mainly due to the disposal of warehouses in Hong Kong at end-September 2021 as well as the implementation of pandemic-induced social distancing measures which has caused a depression in particular retail activities.
In the Mainland of China, the Group’s IL business grew by 33%, mainly from the increase of manufacturing activities as purchase orders shifted back to the Mainland from many Asian countries, boosting its production and export of both components and finished products.
In Asia, the IL division went down by a large extent. This was mainly due to prolonged lockdowns across many countries in Asia, which depressed manufacturing activities. Furthermore, pricing pressure and fierce competition experienced by Kerry Express Thailand in Thailand have also impacted on the Group’s results. The Group is expected to reclaim its dominance in key Asian markets, where profitability will gain traction starting in 2022 2H.
The segment profit of the Group’s IFF business expanded from HK$1 billion to almost HK$5 billion and across all verticals and industries of the business. The disruption and imbalance in the supply chain, especially for exports from Asia to North America and Europe, have seen the Group’s customers increasingly leveraging on the Group’s in-depth industry know-how, its extensive connections to ground operations and its global network. The Group has recorded an increase in urgent fulfilment orders together with ever more complex demands from customers to overcome the multifaceted hurdles in the supply chain.
Strategic Partnership with S.F. Holding
KLN Group’s strategic partnership with S.F. Holding will give it an unparallelled advantage as Asia’s largest 3PL provider to tackle the uncertain market challenges ahead. The two parties are already collaborating in the Mainland of China to serve S.F. Holding’s clients’ overseas business needs. By 2022 Q2, KLN Group will serve as the exclusive cargo General Sales Agent (GSA) for S.F. Airlines, as well as the principal service provider outside the Mainland of China for S.F. Holding’s international express business, firmly establishing KLN Group’s position as S.F. Holding’s international arm.
William Ma concluded, “The complex dynamic system of the global supply chain will remain sensitive to an array of different pandemic responses and measures as well as geopolitics. International freight will face another year of price, volume and capacity volatility. Inflationary pressures and material shortages along the supply side will continue to disrupt global trade for a prolonged period. Although onshoring and reshoring have been discussed widely, it is highly likely that Asia, the manufacturing base of the world, will continue to hold its ground in the next five years. KLN Group and S.F. Holding’s strategic cooperation has opened a new page for both sides. Unique yet competitive service offerings have been co-developed through the ongoing business and operation integrations. As the world is moving faster and further away from the pre-COVID market conditions, we are confident that the new KLN Group is empowered to advance through it.”