Following a doubled profit in Q1, DSV upgrades its full-year guidance to DKK 21-23bn (USD 3.1-3.4bn). Outlook of declining economic growth may become a challenge, though.
The first quarter turned out so well for logistics firm DSV that the copmpany upgrades its 2022 expectations for the operating result (EBITDA) to DKK 21-23bn (USD 3.1-3.4bn) from the previous DKK 18-20bn, according to a financial statement.
The upward adjustment is based on an increased operating profit (EBIT) from DKK 3.067bn in Q1 last year to DKK 6.496bn in Q1 this year.
”For Q1 2022, we report a strong set of results, with earnings growth across all divisions and a strong cash flow,” states DSV CEO Jens Bjørn Andersen in the announcement.
The air and sea freight business saw revenue progress by 94.1 percent to DKK 45.9bn compared to Q1 2021 and an EBIT result of DKK 5.528bn, equivalent to a growth of 108.5 percent in comparison to the same period the year before, even though freight markets ”continue to be impacted by tight capacity and congestion,” says Andersen.
DSV predicts the high demand will continue despite an expectation of a 2-3-percent decline in economic growth of the global GDP throughout the year.
”Uncertainty related to the global economy has increased in recent months; however, we expect that the continued disruptions of global supply chains will support a high demand for our services in 2022,” reads the statement.
Due to Russia’s invasion of Ukraine, DSV is ”in the process of divesting and exiting our activities in Russia,” according to the statement. However, DSV’s revenue in Russia and Ukraine only makes up 1 percent of the group’s total revenue.
Growth through acquisitions
DSV has grown extensively through acquisitions, most recently of company GIL, which Andersen expects to be fully integrated in Q3 this year. DSV is expected to grow further via new acquisitions.
By several analysts, DSV is considered the most suitable buyer of the state-owned, German logistics firm DB Schenker, a subsidiary of Deutsche Bahn, if the German government realizes its considerations to put Schenker on sale.
If a privatization of DB Schenker is part of the political agenda this year, an acquisition of the company could make DSV or competitor Kuehne + Nagel the world’s leading freight forwarder.
According to analyst firm Bernstein, however, it is not unthinkable that the German government would sell off DB Schenker to a German company such as Deutsche Post – not least in order to maintain German workplaces.
