HONG KONG: August 30, 2018. Kerry Logistics has reported a 27 percent increase in turnover for the first six months (H1) of 2018 to HK$17.46 billion, as operating profit rose 19 percent to HK$1.2 billion and net profit grew 22 percent to HK$700 million.

The company said its integrated logistics business increased profit by 25 percent to HK$1.1 billion during the period as a result of “booming intra-Asia trade and e-commerce,  while revenue from its freight forwarding activities rose 6.0 percent to HK$235 million.

“Although the world economy experienced growth in 2018 H1, global demand has been flat,” said Kerry Logistics group managing director William Ma. “Nevertheless, the China-US trade dispute has caused manufacturing capacities to shift from Mainland China to other Asian countries, bringing about an increase in shipping volume and production activities in Asia. Southeast Asia, in particular, has enjoyed the fastest growth in the region,” he noted.

The company said rising labour costs in Mainland China, “subpar performance of certain customers in the electronics sector”, and the China-US trade conflict continued to undermine the group’s business.

In July, Kerry Express Thailand signed a partnership with VGI Global Media Public Company (VGI), a subsidiary of the Bangkok Mass Transit System, to become its exclusive express logistics partner. As part of the deal Kerry sold its 17 percent stake in Kerry Express Thailand to VGI.

Commenting on the Trump-initiated trade war with China, Kerry chairman George Yao said the imposition of tariffs was reshaping trade routes and global supply chains: “While the trade volume between the two economies is expected to reduce in the near future, certain markets in Asia are likely to benefit conversely from the increased intra-Asia trade as customers look for alternative supply sources beyond Mainland China and the US.

“Moreover, Asia has been experiencing the fastest trade volume growth for both imports and exports driven by rising domestic consumption and increased investment. We expect our Asian business to continue to grow and contribute to a major part of the Group’s profit in three to five years’ time,” he concluded.