DSV gross profit grows 61% in Q1 2022 bolstered by air and sea freight

Freight forwarder DSV reported gross profit grew 61% in the first quarter of 2022 with the Air & Sea division achieving an EBIT growth of 109%.

The Air & Sea division’s revenue amounted to DKr45,887m for the first three months of 2022, compared to DKr22,924m for the same period last year.

For the first three months of 2022, gross profit in the division amounted to DKr8,637m, compared to DKr4,788m for the same period last year.

EBIT before special items came to DKr5,224m for the first three months of 2022, compared to DKr2,393m for the same period last year.

The division achieved a 73.6% increase in gross profit and 108.5% increase in EBIT before special items for the first three months of 2022.

DSV said the increase in earnings was driven by “strong gross profit yields in challenging freight markets” and a “continued focus on operational excellence”.

It added that the inclusion of Agility’s Global Integrated Logistics (GIL) business, acquired last year, also contributed positively to the result for the quarter.

DSV achieved 22% volume growth in airfreight for the quarter. Adjusted for the acquisition of GIL, it estimated that DSV volumes grew approximately 2%, slightly above the general market for the quarter.

The pandemic and the Ukraine crisis has continued to put pressure on operations, said DSV .

Available airfreight capacity remains impacted by limited belly capacity in passenger planes, while the closure of Russian airspace led to further capacity tightness during the quarter.

In response to this situation, additional capacity was added to DSV’s Air Charter Network during the quarter.

However, while DSV has subsidiaries in Ukraine, Russia and Belarus, it said the combined revenue in the three countries represents less than 1% of the group’s revenue and therefore “no material direct impact on the financial results or financial position of (the) Group is expected”.

Besides the addition of GIL, the growth in revenue for the first three months of 2022 was driven by significantly higher freight rates for both air and sea compared to the same period last year. The growth was driven by all regions and was highest in APAC and the Americas.

The gross profit increase in the first three months of 2022 was driven by the addition of GIL. Tight capacity, congestion and disruption in global logistics markets have a positive impact on gross profit for airfreight per tonne.

Jens Bjørn Andersen, group chief executive officer, said: “For Q1 2022, we report a strong set of results, with earnings growth across all divisions and a strong cash flow.”

DSV said it expects that the continued disruption of global supply chains will support a high demand for DSV services.

DSV reported a 57.2% year-on-year increase in revenues for 2021

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