DSV sees Q1 profits rise, expects Panalpina deal to close in Q3

Danish forwarding giant DSV, which announced earlier this month that it was purchasing Swiss rival Panalpina, released its first-quarter results today, reporting a 5% growth in airfreight volumes, compared to the previous Q1, reaching 170,000 tonnes, due mostly to a rise in exports to the Americas during the quarter.

Gross profit in the air segment also rose by 11.6% to US$184.8 million, and very strong 20.5% growth in earnings before interest and taxes (EBIT) to $150 million, with “a focus on controlled cargo,” DSV said. Meanwhile, DSV Group revenues were up 8.7%, y-o-y, to just over $3 billion.

“The freight and logistics markets have been characterized by a relatively weak start to 2019, especially for airfreight where estimated market volumes were down 1%,” DSV said. “Under these market conditions, DSV has performed well and gained market share across all business segments.”

“We delivered strong results in Q1 2019, with healthy top-line growth across all divisions and a 15% underlying growth in EBIT,” said Jens Bjørn Andersen, CEO of DSV Group. The performance, he added, “fully lived up to the expectations for 2019 originally published.”

Andersen also noted that the $4.6 billion with Panalpina is expected to close end of the third quarter this year. “However, to facilitate the listing of new shares for the exchange offer to the shareholders of Panalpina, DSV withdraws its outlook for 2019 effective as of today,” Andersen said. “We expect to publish a new financial outlook once the combination with Panalpina is completed.”

DSV also said in its Q1 report that the United States-China tariff issue “had impacted global growth rates,” but said its exposure to the trade lane was only about 10% of air and sea volumes. Meanwhile, it added that the continuing unresolved Brexit situation was also causing uncertainty and was negatively affecting European Union growth.