Hong Kong-based 3PL Kerry Logistics Network saw its net profit grow 7% to HK$1.183bn (US$150.76m) in 2017. The net profit was achieved off the back of a 28% increase in revenue of HK$30.79bn and core operating profit of HK$2.13bn, an increase of 13%.
The integrated logistics segment of the company led the surge in growth, generating 78% of the profit after 12% growth, was boosted by business in Thailand. In Hong Kong new business in various verticals helped Kerry log 18% growth in its logistics business in the territory. But increased competition in China placed a drag on the possibilities of even greater profit.
Kerry Logistics’ international freight forwarding division clocked up a 41% surge in turnover and a 14% rise in segment profit despite rising freight rates putting adverse pressure on profits.
The year 2017 was a period of active asset expansion for Kerry Logistics. To date, the Group is managing a logistics facility portfolio of 52m sq ft, of which 26m sq ft are self-owned. Three logistics facilities in Shanghai and Wuxi, China and Phnom Penh, Cambodia were completed in 2017.
Looking to the future Kerry Logistics’ regional strategy means the firm will be able to play to its strengths by riding both the impetus of the Belt and Road Initiative, where it has acquisitions in China and the CIS countries, and the boom in e-commerce.
Kerry Logistics has set its sights on the strong demand momentum driven by cross-border e-commerce, particularly between Greater China and ASEAN to boost growth. Following the successful launch of its express business in Thailand, Kerry Logistics said it plans to extend the concept to Vietnam, Malaysia and Singapore.
George Yeo, chairman of Kerry Logistics summed up the firm’s current place in the market: “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.”
Kerry Logistics 2017 financial results coincided with the company receiving the “Excellence of the Year for Innovation & Leadership – Logistics Services – Global award at the LeFonti Awards presented in Hong Kong on 26 March.
The Awards praised Kerry Logistics for its leadership in global logistics and its role as an innovator, being one of the first 3PLs in Asia to adopt robotic fulfillment solutions in its flagship facility in Hong Kong.
“We are honoured to be commended by the Awards,” said Samuel Lau, deputy managing director – Integrated Logistics. “At Kerry Logistics we endeavour to create value for our customers and help them build their competitive edge through our trusted and innovative solutions. We are committed to consistently devising new operation models to accommodate their needs and the changes in the global economy. The accolade is the result of the concerted action of our workforce, without whom we would not have made this achievement.”
Backed by the Italian research institute and global independent publishing house LeFonti, the Awards were voted online by readers of LeFonti which has a readership of over 50,000, and were further evaluated by LeFonti’s editorial committee along with a team of legal, economic and financial journalists from over 120 countries.