For the second quarter of this year, Danish ferry and logistics company, DFDS reported that its freight transport fell but the passenger sector had risen.
Overall, revenue went up by 9% to DKK7.6 bill, while EBIT fell by 28% to DKK519 mill.
DFDS’ Ferry Division 2Q24 EBIT decreased 21% or DKK133 mill to DKK508 mill driven by lower freight result, while Logistics fell 41% or DKK60 mill to DKK85 mill, which was driven by margin pressures, shift in customer flows, and under performance in the Nordic Cold Chain.
EBITDA fell 10% or DKK137 mill, following lower results in both the Ferry Division and the Logistics Division.
Freight Ferry EBITDA showed an 8% decline or DKK60 mill, excluding a DKK54 mill decrease in oil spread hedging income. Organic decrease was driven by rate pressures and adverse cost development.
However, passenger EBITDA went up by DKK25 mill, due to higher volumes and spending on the English Channel route.
CEO Torben Carlsen, said: “(The second quarter) turned out to be more challenging than expected and we consequently revised the earnings outlook for 2024, while maintaining the adjusted free cash flow outlook.
“The top priorities for the rest of the year are to continue to protect our key ferry market positions and turn Logistics’ earnings trend around.
“In parallel with addressing these priorities, we will continue to unlock the value of our expanded network and to move our green transition forward.
“We continued in 2Q24 to protect our strategic Baltic and Channel ferry market positions in market environments with rate pressure from overcapacity and limited volume growth. Our ability to fully pass on cost increases is therefore currently reduced.
“We are confident that the short-term protection of our route network will ensure long-term growth and resilience as markets over time move to rebalance supply and demand.
“A large part of our Logistics’ network is performing well in the face of a challenging market environment with heightened margin pressure and large shifts in customer flows in our Belgian and Dutch operations.
“Key focus areas in the rest of the year are to further adapt the cost base to the current pricing environment and to grow volumes organically.
“The top priorities for the rest of the year are to continue to protect our key ferry market positions and turn Logistics’ earnings trend around,” he said.
Overall, DFDS said it expected to complete the ongoing turnaround of the Nordic unit by year-end and expected Logistics Division’s 3Q24 result to remain below 2023, while the 4Q24 result is forecast to exceed 2023s.
As for the full year outlook, the EBIT range was lowered following the 2Q24 result being below expectations and continued market headwinds are expected for the rest of year.
The adjusted free cash flow outlook is unchanged at around DKK1.5 bill.
