Freight-forwarder DSV expects earnings boost from Red Sea disruption
Adds market share in paragraph 2, Red Sea disruption in 4, operational efficiency program in the final paragraph
By Isabelle Yr Carlsson and Jacob Gronholt-Pedersen
COPENHAGEN, July 24 (Reuters) -Denmark's DSV DSV.CO said on Wednesday that higher freight volume boosted earnings in the second quarter and that it expects a positive impact from disruption in the Red Sea in the second half of the year.
The world's third-largest freight forwarder said it increased volume and continued to gain market share in its sea, air and road divisions during the second quarter.
"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 and Sea division," CEO Jens Lund said in a statement.
The financial impact of Houthi militant attacks on shipping in the Red Sea was not yet reflected in the results but is likely to have a slightly positive impact on the rest of the year, DSV said.
While the situation in the Red Sea has pushed up freight rates, benefiting mostly container shipping companies like Maersk MAERSKb.CO, it has also resulted in more business for freight-forwarders like DSV.
DSV narrowed its full-year guidance and now expects earnings before interest and tax (EBIT) and special items at 15.5 billion to 17 billion Danish crowns ($2.25 billion to $2.47 billion)instead its previous range of 15 billion to 17 billion.
The figure for its second quarter fell to 4.10 billion crowns from 4.71 billion a year earlier. The result compared with an average 3.99 billion forecast by analysts in a poll shared by the company.
The company said it had launched an initiative to improve operational efficiency which will materialise gradually over the second half of the year and have a positive impact on operating profit of 750 million crowns next year.
($1 = 6.8806 Danish crowns)
Reporting by Isabelle Yr Carlsson; Editing by Jacob Gronholt-Pedersen and Christopher Cushing
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