Denmark's DSV, the world's third-largest freight forwarder, has predicted a recovery in global trade volumes after the firm surpassed profit forecasts in the first quarter despite seeing lower volumes and freight rates.
The logistics group has benefited from stratospheric freight rates in the wake of the pandemic but a decline in global consumer demand due to cost inflation and high inventories has since prompted rates to drop.
"As anticipated, the demand for transport services and freight rates declined during the first quarter of 2023," CEO Jens Bjorn Andersen said in a statement.
"We expect that global trade volumes will improve gradually in the upcoming quarters," he said.
While revenues declined by nearly a third in the first three months compared to the same period last year, reflecting lower trade volumes, the firm managed to curb a decline in gross profit to 11.4% by focusing on higher-yielding cargo.
"Strong price discipline, great yields and a better-than-expected operating profit. A solid start to the year for DSV," Sydbank analyst Mikkel Emil Jensen told Reuters.
The company said it expects yields to decline in the next quarter as freight markets normalise.
First-quarter operating profit before interest, tax and special items was DKK 4.7 billion (€630 million), down 28.2% compared to the same period last year, but above a mean forecast of DKK 4.2 billion (€560 million) in a DSV poll of analysts.
The company, which also launched a DKK 4.5 billion (€600 million) share buy-back programme running from April to July, maintained the full-year operating profit outlook given earlier this year.