Changes pay dividend for DSV
Danish diversified transport and logistics group, DSV DFDS has reported satisfactory results for the first quarter of 2003. Net revenues reached DKK 4,287m (€577m) an increase of 2.9% compared with the same period in 2002 although operating profits (EBITA) fell by 3.4% to DKK 169m (€22.7m). This was still ahead of the company’s forecast, and management considered the performance to be highly satisfactory given the difficulties which it has experienced over the last year.
DSV DFDS has operations in three key sectors: road, air and sea freight and logistics. Within the road freight sector there was a considerable mix of results. Business in the home Nordic region held up well, although UK and Germany were behind budget and the company made a loss in France. In the forwarding division a major part of the profits were generated by its US subsidiary. It reported operating profit margins (EBITA) of over 10%. DSV’s logistics division, which is now a 50:50 joint venture with TNT, performed below expectations although it did manage to break even after a loss in the first quarter of 2002.
The company believes that the changes it has implemented in the management of key divisions have started to have a positive affect on results. New management has been appointed in two of the most important units: UK (road) and Denmark (air and sea). It has also entered into an alliance with Geodis (Elix) which should give it sufficient scale to compete with the networks of Danzas and Schenker. Although the company has had a difficult year, and has faced issues with the integration of its DFDS acquisition, it is still very ambitious in the medium term. However in the short term it still believes 2003 will be a hard year.
