Kuehne & Nagel International AG reported fourth-quarter profit fell 15 percent as the company wrote down the value of its overland transportation operations in Europe.
Net income dropped to 123.2 million Swiss francs ($120.8 million), or 1.05 francs a share, from 144.1 million francs, or 1.22 francs, a year earlier.
Kuehne & Nagel, which makes most operating profit arranging shipment of goods by sea and air, called the outlook for 2008 ``cautious.'' World trade volume growth will probably slow to 7.4 percent in 2008 from an estimated 8.7 percent last year, the World Bank said in January.
Kuehne & Nagel fell as much as 5.1 francs, or 5.2 percent, to 94 francs in the worst drop since Feb. 6 and was down 3.7 percent as of 10:06 a.m. in Zurich . The stock has fallen 12 percent this year, valuing the company at 11.5 billion francs.
“While 2007 was characterized by a favorable global economy and strong global trade, forecasts for 2008 are cautious,'' Chairman Klaus-Mickael Kuehne said in the statement. "In view of these circumstances, we will intensify our efforts to improve internal processes and optimize cost management.''
Earnings before interest, taxes, depreciation and amortization rose 24 percent to 302.9 million francs. Sales increased 14 percent to 5.6 billion francs. The company proposed raising the 2007 dividend to 1.90 francs a share from 1.50 francs a year earlier.
Impairments for overland transport businesses acquired in Greece and Germany, totaling about 57 million francs, weighed on fourth-quarter profit. Income tax payments increased to 37.6 million francs from 27.6 million francs a year earlier.
Kuehne & Nagel added to its European overland transport operations with the purchase of two German competitors last November and said today it plans to expand the business further.
The Swiss company agreed in November to purchase German overland transport companies G.L. Kayser Spediteur, based in Mainz, and Cordes & Simon Group, based in Hagen, which have combined sales of 220 million euros ($338 million). The companies agreed at the time not to disclose purchase prices.
Kuehne & Nagel said it aims to "clearly outperform the market while maintaining stable margins'' this year in the sea- freight, air-cargo and contract logistics businesses.
The sea-freight unit recorded a 15 percent increase in volumes in 2007 compared with a year earlier. The amount of cargo arranged by the air-freight division rose 14 percent last year.
Kühne & Nagel is a German-founded transportation and logistics company based in Schindellegi, Switzerland. It is the world's largest non-vessel operating common carrier, and as such, has strong buying leverage with the major shipping lines of the world.
In the United Kingdom, the company regularly features in the top four in the IATA air freight forwarders league table.
August Kuehne and Friedrich Nagel founded the forwarding and commissioning business in 1890 in Bremen, Germany, concentrating on cotton and consolidated freight.
Currently, Kühne & Nagel employs approximately 48,000 people in 830 offices distributed over more than 100 countries.
Kuehne & Nagel competes with Basel, Switzerland-based Panalpia Welttransport Holding AG and Bonn-based Deutsche Post AG. Kuehne & Nagel won a 10-year contract in October from U.K. bottler Britvic Soft Drinks to deliver beverages to pubs, bars and food service outlets across the U.K. as well as manage the replenishment of 10,000 vending machines.
One should expect a winter escalation of hostilities. We will definitely see it either in December or early next year. There is no reason for a break - only a small part of the mobilised has been deployed to the zone of the special operation yet