Kuehne
Global logistics business Kuehne Nagel has been hit by an antitrust fine and increasing costs (Reuters)

Kuehne + Nagel Group's shares plunged on the news of the Swiss logistics and transportation giant's unsatisfactory first-quarter results - and warned that more cost-cutting was on the way.

Increasing costs, decreasing profit margins, and a big antitrust fine ensured Kuehne's year-on-year net earnings dropped for the first three months of 2012.

"In the first quarter of 2012 we had to cope with a number of adverse factors," Reinhard Lange, chief executive of Kuehne + Nagel International, said.

"Our investments in growth initiatives resulted in considerable cost increases. We will counteract this trend with strict cost control and measures to improve productivity."

The company's shares were down on Switzerland's SIX by 7.56 percent to CHF 110.10 (£75.31) at 1.15pm CET.

Kuehne's net earnings, excluding the antitrust fine, were down fell 14.2 percent to CHF 133m for the quarter.

Inclusive of the CHF 65m antitrust fine, net earnings were CHF 68m.

In March EU regulators fined four big freight companies, including Kuehne, for being involved in price-fixing cartels.

The company blamed its investment in growth and IT services for a falling profit margins in its airfreight and seafreight businesses.

Its airfreight division made a loss of CHF 11m.

"In seafreight, Kuehne + Nagel increased container volume by 9 percent while - according to first estimates - the global container market grew between 3 and 4 percent," said the company's statement.

"The international airfreight market experienced a significant volume decline in the first three months of 2012, resulting in a contraction of 3 percent after an encouraging volume development in the same period of 2011.

"Kuehne + Nagel raised tonnage by 4 per cent."

Lange said that the first quarter results means Kuehne has "intensified" its cost management.

"We are confident that the measures implemented as well as solid growth will contribute to an improvement of results in the second half of the year," he said.