Denmark's DSV, the world's third-largest freight forwarder, raised its full-year profit guidance earlier this week on the back of stronger-than-expected second-quarter earnings and predicted a recovery in global trade volumes.
While demand for transport and logistics services was soft, DSV had been able to adapt to changing market conditions in the first half of 2023, CEO Jens Bjorn Andersen said in a statement.
'Solid Set Of Results'
“In Q2 2023, we delivered a solid set of results across all three divisions and a strong cash flow," he said. "The demand for transport and logistics services is soft, and during the first half of 2023 we have demonstrated our ability to adapt to changing market conditions.
"The market development outlook is still uncertain, but we see signs of stabilisation and we anticipate gradual improvement in global trade volumes over the next quarters.”
Operating Profit Expectations
The company now expects operating profit before special items of between DKK 17 billion (€2.28 billion) and DKK 18.5 billion (€2.48 billion), compared to an earlier estimate in the range of DKK 16 billion (€2.15 billion) and DKK 18 billion (€2.42 billion).
'The upgrade is based on DSV’s performance in H1 2023 and the assumption of a gradual improvement in global trade volumes in H2 2023,' the company said in a statement. 'As the global logistics markets continue to normalise, we expect a further decline in gross profit yields for air and sea compared to the H1-23 levels.'
Operating profit before interest, tax and special items came in at DKK 4.7 billion in the second quarter, down from around DKK 7.5 billion a year ago but above a DKK 4.6 billion average forecast by analysts polled by DSV.
Additional reporting by ESM