DSV Q2 revenue up 9% on volume gains across divisions

DSV reported a nine percent increase in revenue at DKK 41 billion for the second quarter of 2024 compared to DKK 37.7 billion in the second quarter of 2023, "characterised by an uptake in volumes and market share gains across all three divisions."

Profit for the period declined 20 to DKK 2.7 billion from DKK 3.4 billion in Q22024, says an official release.

“In a challenging environment, we delivered a strong financial performance in Q2 2024 driven by positive volume growth and stabilisation of gross profit per unit in the Air & Sea division," says Jens H. Lund, Group CEO, DSV. "We continue to gain market share across all three divisions, driven by our strengthened commercial platform. Furthermore, we have increased our productivity in all three divisions.”

NEOM update
The exclusive logistics joint venture to provide logistics services for the projects in the NEOM region is mobilised and ready to go live but is awaiting final approvals from local authorities, the release added.

"The timing of investments in the joint venture will follow the progress of the individual projects in NEOM. Based on current plans, we expect the joint venture activities to ramp up over the next three-four years.

"The joint venture will have a positive impact on the DSV network, and we expect a return on the invested capital in line with our financial targets."

H1 results mixed
Revenue increased marginally (one percent) to DKK 79.5 billion compared to DKK 78.7 billion in the same period of 2023. Profit for the period declined 23 percent to DKK 5.1 billion.

The air and sea segment reported a two percent decline in revenue at DKK 47.3 billion for the first half, and EBIT was down 23 percent at DKK 5.5 billion.

"For H1 2024, the air & sea revenue was positively impacted by higher volume partly offset by lower average freight rates compared to the same period last year, leading to a slight decline in revenue for H1 2024. Compared to H1 last year, the gross profit yields have normalised and remained relatively stable throughout H1 2024. There has been no significant financial impact from the situation in the Red Sea, and we estimate that the division has gained market share."

"The global air freight market was impacted by high growth in the e-commerce segment, especially on China export volumes. This tied up a significant part of the available capacity and kept rates elevated, particularly for air freight out of APAC. On other trade lanes, available capacity increased due to more passenger travel and airlines’ summer schedules.

"Adjusted for e-commerce and perishables, we estimate that our addressable market grew by mid-single digits in Q2 2024."

DSV’s air freight volumes grew by 10 percent in Q22024 (349,076 tonnes) and by six percent in H1 2024 (684,289 tonnes) compared to the same period last year. "The increase was mainly driven by improved export from APAC, which was positively impacted by growing textile and pharma customer volumes out of China and sea-to-air conversion in the Indian sub-continent. We estimate that we have grown faster than our addressable market on air freight.

"DSV’s sea freight volumes increased four percent during Q2 2024 and by six percent in the first half of 2024 compared to the same period last year. We estimate that we have grown in line with the sea freight market. The strongest growth rates continued to be recorded on export volumes out of APAC."

Road & Solutions divisions report growth
The Road division saw revenue increase six percent to DKK 21 billion and EBIT was marginally higher at DKK 1.04 billion for the first half of 2024. The Solutions unit saw revenue increase 12 percent to DKK 12.9 billion and EBIT was flat at DKK 1.2 billion.

"The Road and Solutions divisions experienced revenue growth in H1 2024 compared to the same period last year. Road was primarily driven by higher volumes in our European groupage network, though partially offset by lower market rates. The Solutions division grew revenue primarily due to increased number of order lines, new wins and further development of our global footprint."

2024 outlook
Based on the performance in the first six months of 2024 and expectations for the rest of the year, DSV is expecting an EBIT before special items to be in the range of DKK 15.5-17 billion (previously DKK 15-17 billion). One-off costs (special items) are expected to be around DKK 650 million in 2024.

The company has announced a buyback programme of DKK 1.5 billion, which will run till October 22, 2024.