Kerry Logistics Network Limited (OTC:KRRYF) scored a first-half-year net profit of HK$845 million (US$109 million), up 26% over the same period last year, despite a significant downturn in warehouse business caused by the coronavirus pandemic.
A decline in logistics revenue from operating fewer warehouses in Hong Kong was offset by strong growth in last-mile fulfillment and e-commerce logistics.
Demand for general warehousing and regional distribution centers plummeted this year across Asia with the coronavirus' impact on global manufacturing and consumption patterns. Kerry Logistics said it quickly exited several warehouses in Hong Kong and pivoted to handle logistics for pandemic-related medical gear and other essential supplies.
The Hong Kong-based third-party logistics company credited the financial success to its freight forwarding operation, which generated a 40% increase in first-half net profit.
"Kerry Logistics leveraged its unique market position as one of the very few Asia-based global freight forwarders, with broad exposure in key gateways across continents and ability to capture new business opportunities as the pandemic spread," the company said in a press release on Thursday.
The 3PL said its airfreight forwarding business experienced a big rise in volume between March and May, while ocean freight forwarding saw an increase in freight volumes as shippers started replenishing their inventories in May and June.
Kerry Logistics also pointed to the positive impact of its March acquisition of Apex, making it one of the largest freight consolidators by volume from Asia to the U.S.
Kerry Logistics in May acquired a 42% share of a private express company in Vietnam which currently handles about 800,000 parcels a day.
With the increase in warehouse service across Asia since April, the 3PL expects that its full-year results will continue to improve.
Kerry Logistics continues to reorganize its Asia operations, recently completing the disposal of a warehouse operation in Adelaide, Australia, and initiating the spinoff of Kerry Express Thailand from the Securities and Exchange Commission of Thailand.