Copenhagen-based logistics and transport group DFDS reported fourth quarter 2021 revenue increased 46% to DKK5.5 bill.
This rise was driven by the acquisition of HSF Logistics Group, higher revenue from bunker surcharges and a doubling of passenger revenue from the low level seen in 4Q20.
However, passenger revenue remained far below pre-Covid-19 levels through 4Q21.
EBITDA increased 19% to DKK915 mill. The total freight EBITDA for ferry and logistics before special items increased 9% to DKK946 mill driven mainly by the acquisition of HSF Logistics. Supply chain bottlenecks eased during 4Q21 and towards the end of the Quarter, UK freight flows also normalised.
The total EBITDA for passenger activities in the Baltic Sea, Channel and passenger business units increased DKK67 mill to DKK – 30 mill.
As for the outlook for 2022, the Group’s revenue is expected to increase by 23-27%, compared to last year. The two main growth drivers are the full-year impact of the acquisition of HSF Logistics and a recovery in passenger revenue. In addition, freight volumes are expected to grow in most markets.
The Group’s EBITDA before special items is expected to be within a range of DKK3.9-4.4 bill (2021= DKK 3.4 bill), the company said.
Overall, the European freight market continued to grow in 4Q21, although some uncertainty about growth expectations for 2022 started to emerge towards the end of the quarter.
Turkey’s GDP-growth and further depreciation of the Turkish Lira (TRY) continued to support industrial production in the country’s export sector. Activity levels also continued to grow in the Baltic region and Scandinavia, as well as most parts of Continental Europe.
The supply chain bottlenecks that led to a slowdown in especially UK freight flows in 3Q21 eased during the quarter and towards the end of the period, UK freight flows had normalised. There was no material impact on freight flows in January, 2022 following the implementation of further UK border controls on 1st January.
However, the European market for passenger ferry travel remained negatively impacted by travel restrictions in 4Q21. Travel restrictions were to a large extent removed in Scandinavia but uncertainty about rising pandemic infection numbers and testing requirements held back travel.
Travel restrictions between the UK and neighbouring continental countries were upheld for most of the quarter and testing requirements resulted in ferry travel at very low numbers.
The freight capacity and passenger experience will be boosted by the deployment of two ropax newbuildings this year.
In December, last year, the first of the two ropaxes was delivered from a Chinese shipyard. The new ferry can carry 4,500 lane metres of freight and cars, as well as 600 pax.
CO2 emissions per trailer are expected to be lowered by more than 20% by the new ferries that comply with the new IMO design standards – Energy Efficiency Design Index.
The new ferry was deployed on the Karlshamn/Klaipeda route in late January, 2022.
DFDS said that the EBITDA for passenger services across business units – Passenger, Channel and Baltic Sea – was reduced by around DKK1 bill in 2020, compared to 2019, and remained on a level with 2020 in 2021.
This was a consequence of the travel restrictions that were imposed to limit the spread of Covid-19.
The company’s outlook initially assumes that around 50% of the EBITDA decrease of the two previous years is regained in 2022. The current most likely scenario is that travel restrictions will continue to limit travel in 1Q22, while subsequent easing of restrictions and a gradual return to historic travel patterns are expected to increase the number of passengers, compared to 2021.
Passenger numbers carried in 2021 was 83% below the pre-Covid-19 level in 2019.
A third ferry operator entering the Dover Strait market created considerable overcapacity, which is likely to increase the market’s price pressure and reduce incumbents’ market share.
However, duty-free sales are expected to mitigate these effects somewhat, DFDS said.