KLN Delivers 10.00% Revenue Uptick but Faces 8.31% Core Operating Profit Decline in 1H26

Bulletin Express
08/28

KLN Logistics Group Limited (KLN, 00636) reported unaudited interim results for the six months ended 30 June 2026, showing a resilient top‐line performance offset by margin pressure.

Revenue and Profitability • 1H26 revenue rose 10.00% year on year to HK$29.85 billion, driven by expanded customer wins and stronger volumes across key markets. • Gross profit slipped 5.68% to HK$2.77 billion as freight and transportation costs climbed 11.09% to HK$23.18 billion. • Core operating profit fell 8.31% to HK$1.24 billion, reflecting tighter margins and higher operating expenses. • Finance expenses decreased 17.24% to HK$221.21 million, supporting a 2.17% gain in core net profit to HK$695.35 million. • Profit attributable to shareholders improved 4.08% to HK$674.62 million; basic and diluted EPS each edged up to HK$0.37 from HK$0.36.

Segment Performance • Integrated Logistics (IL) revenue (before elimination) advanced 19% to HK$9.23 billion, yet segment profit contracted 6.74% to HK$665.15 million amid customer rate pressure and higher fuel and talent costs. • International Freight Forwarding (IFF) revenue (before elimination) increased 12% to HK$26.07 billion, while segment profit declined 6.95% to HK$855.12 million as competitive pricing and elevated fuel costs weighed on margins.

Geographic Trends • Chinese Mainland remained the largest contributor with HK$9.53 billion revenue (+18.10% YoY). • Hong Kong generated HK$3.92 billion (+9.91%), supported by healthcare and new construction‐related contracts. • Asia Pacific reached HK$4.21 billion (+8.99%); Malaysia, Vietnam and Cambodia benefited from supply‐chain diversification. • Americas delivered HK$6.66 billion (+0.64%), retaining KLN’s position as the leading Trans-Pacific NVOCC. • EMEA revenue climbed 8.54% to HK$5.53 billion amid robust logistics demand.

Balance Sheet and Liquidity • Cash at bank and in hand stood at HK$5.96 billion as of 30 June 2026, versus HK$6.34 billion at end-2025. • Total bank loans and overdrafts were broadly stable at HK$8.82 billion, of which 54% was denominated in Renminbi and Singapore dollars. • Gearing ratio eased slightly to 48.8% (31 Dec 2025: 49.9%). Undrawn bank facilities totalled HK$10.98 billion, providing headroom for capital expenditure.

Dividend The Board declared an interim dividend of HK$0.12 per share, up from HK$0.11 a year earlier, payable on or about 25 September 2026 to shareholders on record as of 11 September 2026.

Management Commentary The Board cited ongoing geopolitical tensions, freight‐rate volatility and higher fuel costs as headwinds but noted that disciplined cost and treasury management supported bottom-line growth. KLN will continue investing in digitalisation, network expansion and specialised logistics solutions under its “KLN 2.0” strategy to capture opportunities from supply-chain diversification and technology-driven trade flows.

Regulatory and Governance Highlights KLN affirmed full compliance with the Hong Kong Listing Rules’ Corporate Governance Code during the period. The interim results have been reviewed by PricewaterhouseCoopers and the company’s audit and compliance committee.

No material events, other than proposed revisions to existing continuing connected transaction annual caps, were reported after the balance‐sheet date.

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