Logistics and supply chain company Kerry Logistics’ first half profits grew by 22% compared with the same time last year.
The Hong Kong-based company’s rise in profits comes despite fears of a trade war and global demand remaining flat.
Its information logistics (IL) department, the segment of the business that deals with the flow of data between different parts of the supply chain, saw its profit increase by 25%.
In Hong Kong alone, Kerry Logistics’ IL department grew by 71%, and throughout Asia it rose by 54% as manufacturers begin to shift their focus away from mainland China towards other parts of the region, particularly South-East Asia.
The US Trade Representative (USTR) is currently consulting on the proposed $200 billion worth of tariffs on China, due to come into effect on September 6, 2018.
Speaking about the results, George Yeo, Chairman of Kerry Logistics, said: “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.
“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.”
Kerry Logistics’ 2018 interim results were announced today. Turnover increased by 27% to HK$17,461m while core net profit increased by 22% to HK$700m, propelled by strong Asia trade and increasing volume in the region.
— Kerry Logistics (@KerryLogistics) August 30, 2018
William Ma, Group Managing Director of Kerry Logistics, also commented: “Although the world economy experienced growth in 2018 1H, global demand has been flat.
“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.”