DSV posts better than expected performance in Q1


Danish freight forwarder DSV has seen airfreight volumes rise in the first quarter (Q1) of 2016, which contributed to overall higher revenues – in its first quarterly report since buying UTi Worldwide for $1.35 billion on 22 January 2016.

The world’s fourth largest forwarder says its Air & Sea Division delivered the best performance for the first quarter (Q1) reporting organic growth of 3.6 per cent compared to Q1 2015.

The Air & Sea Division report a volume increase in airfreight tonnage of approximately 71 per cent in Q1 2016 to 122,817 tonnes, compared to the same period of 2015, of which it notes around 66 per cent of the growth originates from UTi.

Airfreight revenues increased by 50.2 per cent to 3.2 billion Danish Kroner (DKK) ($490 million) and air gross profit was up 73.1 per cent to 888 million DKK.

Overall forwarding saw revenues increased by 30 per cent to seven billion DKK and earnings before interest and tax increased by 6.7 per cent on Q1 2015 to 414 million DKK.

In Q1, DSV’s overall revenue was 15,319 million DKK up on the 12,601 million DKK achieved in Q1 2015, while gross profit was 3,607 million DKK in Q1 this year, up on the 2,682 million DKK in Q1 2015.

Total growth for DSV in Q1 was 34.5 per cent, which the company says is mainly attributable to UTi: “Compared to net revenue, the acquisition of UTi had a relatively large impact on gross profit, which has not seen a similar negative effect of the drop in freight rates.”

DSV chief executive officer, Jens Bjørn Andersen says: “The acquisition of UTi has been a major theme in the first quarter of 2016. We took over the company at the end of January, and the integration process is ongoing.

“We have had a good start and the process is proceeding according to plan. It is of the utmost importance that we take good care of our customers during this phase— so far we have been successful doing that and it is something that we monitor closely.

“As anticipated, UTi contributed a loss in the first months of the year, but the existing DSV operations continued the positive development of 2015.”