DSV Q2 revenue up 9.1%

Danish freight forwarder DSV today reported 41.2 billion kroner ($6 billion) in second-quarter revenue, an increase of 9.1% year over year. [caption id="attachment_57065593" align="alignright" width="300"] (Courtesy/DSV)[/caption] THE BIG PICTURE: In line with other freight forwarders , DSV’s earnings reflect a normalizing supply chain following the upheaval of the pandemic. DSV reported a 5% YoY decline in revenue in Q1 and 36% YoY decline in 2023 revenue . BY THE NUMBERS: DSV reported $3.6 billion in revenue from its Air and Sea division, up 8.1% YoY. Air and Sea recorded the highest revenue of all divisions, but the lowest YoY growth. DSV also reported in Q2: Gross profit of $1.6 billion, down 4.3% YoY; EBIT before special items of $595.3 million, down 12.9% YoY; Road revenue of $1.5 billion, up 9.1% YoY; Solutions revenue of $1 billion, up 17% YoY; and Group and eliminations revenue loss of $135.9 million. WHAT THEY’RE SAYING: DSV reported a 10% YoY increase in air cargo volume in Q2 to 349,076 tonnes and a 4% increase in sea freight volume to 666,310 twenty-foot equivalent units. Air and Sea revenue was positively affected by higher volume partly offset by lower average freight rates compared with the corresponding period last year, according to today’s earnings report. DSV had a “very positive second quarter for Air and Sea division,” Chief Executive Jens Lund said on today’s earnings call. “T he yield [in air] was a little bit down, but we see that the tonnage is going up.” The yield appears to be plateauing heading into Q3, Lund said. “The markets where we're doing well are obviously out of the [Asia-Pacific] area,” Lund said. “It's in areas like textile and also in the health care segment that we're doing well." The air cargo market was buoyed by high e-commerce growth , especially out of China, and sea-to-air conversion in the Indian subcontinent, according to the report. “This tied up a significant part of the available capacity and kept rates elevated, particularly for airfreight out of APAC,” the report stated. “On other trade lanes, available capacity increased due to more passenger travel and airlines’ summer schedules.” DSV said there has been no significant financial impact from the supply chain disruption in the Red Sea . FLASHBACK: DSV ranks third on Air Cargo Next ’s Power 25 lis t of top freight forwarders, moving 1.6 million tonnes of air cargo in 2022. FUTURE LOOK: DSV has narrowed its full-year EBIT guidance to between $2.3 billion and $2.5 billion. The company also launched a share buyback program today of $217.8 million. DSV launched a companywide “operational efficiency initiative” in Q2 and expects to see gains from this in the second half of the year. DSV had a headcount of 73,881 employees as of June 30, down 0.4% from June 30, 2023. THE BOTTOM LINE: “We believe we have produced a strong set of Q2 results, with sequential growth and market share gains,” Lund said. “And, of course, our operational efficiency has always been a trademark of DSV and we [will] try to put a little bit more focus on that in the coming quarters.” MARKET REACTION: Shares of DSV ( OTCMKTS: DSDVY ) were up 2.79% from market open to $89.63 as of market close today. DSV has a market capitalization of $37.4 billion. Editor’s note: All amounts have been converted to U.S. dollars.

DSV Q2 revenue up 9.1%

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