DSV’s airfreight volume growth outpaces market in Q3

Danish freight forwarder DSV continued to report above market airfreight volume growth during the third quarter and said it expects to gain approval of its takeover of UTi early next year.
During the third quarter of the year, DSV’s airfreight volumes increased by 9.6% compared with the same period in 2014 against an estimated market growth of 0-1%.
Meanwhile, airfreight revenues for the period increased by 2.4% year on year to DKK2.3bn and its gross profits jumped by 16.4% on a year earlier to DKK574m.
Its airfreight volume growth was ahead of that of the other major European forwarders to report results for the third quarter.
Kuehne+Nagel recorded a 5.1% year-on-year increase to 312m tonnes on increasing demand for specialised services in the industry segments automotive, pharma, aerospace and perishables, while Panalpina recorded a 2.8% decrease in airfreight volumes to 207m tonnes as it moved less oil and gas and automotive cargo, but more perishables.
DSV said its airfreight revenues were pulled down by lower rates while gross profits were boosted by the increased demand and currency effects.
“Net revenue was positively affected by high exchange rates and increasing freight volumes, but the average freight rates were lower than for the same period last year,” it said.
“The freight rates of both shipping companies and airlines are volatile, and rate fluctuations impact directly on the prices DSV charges its customers.”
The overall company, including its warehousing and road divisions, saw third-quarter revenues increase by 2.1% on a year earlier to DKK12.5bn, while net profit for the period leapt by 19.7% to DKK578m.
It said revenues and profits were positively affected by volume improvements and the fact last year it had higher outgoings related to an operational improvement programme.
Chief executive Jens Bjørn Andersen said: “We are extremely pleased with the progress for the third quarter of 2015; DSV has gained market share in all business areas, with both earnings and cash flow keeping up.
“The air & sea division continues the positive development and delivers 24% growth in operating profit, and we can raise our overall performance outlook for 2015.
“Very recently, we announced the acquisition of UTi Worldwide and the transaction is expected to be approved by the UTi shareholders and the relevant authorities during the first quarter of 2016.
“It is the largest business acquisition ever in the history of DSV and we look forward to offering customers an even stronger network.”
Its move to takeover UTi will create the world’s seventh largest airfreight forwarder.