DSV second quarter income resilient against weakened demand
26 / 07 / 2022
Jens Bjørn Andersen. Image source: DSV Panalpina.
DSV has reported positive air results for the second quarter of 2022, aided by ongoing oceanfreight disruption and its acquisition of Agility’s Global Integrated Logistics (GIL), against a softening of demand.
In the second quarter of 2022, the forwarder’s Air & Sea division reported a 102.7% year-on-year increase in earnings before interest and tax (ebit) before special items to DKr6.2bn.
DSV said: “The significant increase in EBIT before special items was driven by the inclusion of GIL and general growth in gross profit and was further supported by the continued focus on productivity, optimisation and cost management.”
The division’s second-quarter revenue amounted to DKr47.3bn, representing growth for the quarter of 72.5% on last year.
Besides the addition of GIL, revenue growth was driven by higher air and sea freight rates compared to last year. These rates have offset a decline in volumes, said DSV.
Revenue growth was driven by all regions, however, it was highest in APAC and the Americas.
DSV achieved 15% year-on-year volume growth in airfreight in the second quarter to 402,594 tonnes against an estimated market decline of 7-10% for the period.
The company said its volumes had benefited from the acquisition of GIL.
Overall company ebit before special items was DKr7.5bn for the second quarter of 2022, an increase of 108.7% against last year. Revenue was DKr62.7bn in the second quarter, up 65.8%.
Group chief executive Jens Bjørn Andersen said: “In Q2 2022, we continued to deliver strong results across all business areas.
“For the first six months of the year, EBIT before special items doubled and free cash flow more than tripled compared to the same period last year.
“We have now completed most of the GIL integration, and we can look back on a swift and successful integration, thanks to a solid effort across our organisation.
“The uncertainty in the global economy has intensified and the demand for freight services has softened in recent months.
“Still, large parts of global supply chains are challenged by congestion, and our focus remains on assisting and finding the right solutions for our customers.”
Speaking about the company’s full year outlook for 2022, DSV said ebit before special items is expected to be in the range of DKr23-25bn.
The company said it expects that “demand for air and sea freight transport will remain soft for the rest of the year” and “uncertainty” about how the global economy and congestion in the logistics market will develop remains. Integration of GIL will bolster earnings into 2023, said the company.