Kintetsu struggles in Japan and with APL Logistics in Q2, performs better elsewhere


Kintetsu World Express (KWE) reported net sales of Y114,074m, an increase of 37.9% year-over-year, mainly due to the effect of its acquisition of APL Logistics (APLL). Conversely, operating income was down by 25.3% to Y1,915m.

In its core market of Japan (not impacted by APLL), air freight exports were up 3.3% in tonnage terms thanks to higher volumes of semiconductor manufacturing equipment, which offset sluggish automotive parts volumes. Air freight imports (based on the number of shipments) fell by 4.2% due mainly to weak electronics volumes. In sea freight, export TEU volumes were up by 7.0% thanks to increases in equipment, machinery and semiconductor-related items. The number of import shipments were up by 1.7% due to “steady movements in electronic products. Net revenues and operating income fell by 8.2% and 51.8% respectively. Operating margin fell from 2.2% to 0.7%.

Ignoring the impact of APLL, KWE revenue fell in all of its other operating regions: Americas (-21.7%), EMEA (-19.1%), East Asia & Oceania (-18.8%) and Southeast Asia (-14.8%), likely primarily on account of lower freight rates. Operating income fell in Americas (-32.5%) and EMEA (-13.2%), but increased in East Asia and Oceania (+34.5%) and Southeast Asia (+30.9%). Overall though, the operating margin in these four regions improved from 4.0% to 5.3%.

Lastly, APLL’s profit was lower than expected, an operating loss of Y1,125m. Although growth from the automotive sector was described as “steady”, retail, consumer and industrial business was lacking.

Source: Kintetsu World Express