KION Group has reported an increase in profitability in the first half of 2023, mostly driven by strong earnings from its Industrial Trucks and Services (ITS) segment.

The German forklift-maker attributed the result to an improvement in the global supply chain as well as its own efforts to increase commercial and operational agility.

KION chief executive officer Rob Smith said: “The agility and performance measures initiated last year are paying off.

“The positive development in the ITS segment is impressive proof that the determined focus of the entire KION team on the right levers has made the company much more resilient and agile going forward. 

“We are therefore raising our guidance for 2023 for both the group and the ITS segment.”

KION Group expects to post EUR11.4 billion (USD12.5 billion) in revenue for the full year, up from the EUR11.2 billion (USD12.3 billion) forecast in April.

In the first half, revenue rose by 1.5% from the same period last year to EUR5.617 billion (USD6.2 billion), while adjusted EBIT increased by 11.7% to EUR348.3 million (USD382.4 million).

The ITS segment posted a 19.9% increase in revenue to EUR4.135 billion (USD4.5 billion), mainly resulting from measures to improve material availability. 

Price increases implemented in 2022 also had a positive impact, however the group’s order intake declined 1.3% in the first half to EUR5.3 billion (USD5.8 billion).

The company said revenue from its service business was up 13.5% as volumes grew across all service categories. However, revenue from its Supply Chain Solutions (SCS) segment fell by 28.6% year on year to EUR1.497 billion (USD1.64 billion), primarily due to muted customer demand in the project business in the previous quarters. 

The company said it was still in the process of exiting Russia, a move announced in October 2022 after the country's invasion of Ukraine.

KION said it had signed a contract in June this year to sell its Russian business as part of a management buyout.

“The transaction is still subject to approval by the Russian authorities,” the company said. 

“The SCS segment’s remaining business in Russia is being wound up at the same time. Once the contracts come into force, the KION Group will no longer have any business activities in Russia.”