DSV raises outlook as global supply rumbles keep freight rates high

A general view of Denmark’s DSV warehouse in Copenhagen, Denmark, October 3, 2016. REUTERS/Jacob Gronholt-Pedersen

COPENHAGEN, July 26 (Reuters) – Freight forwarder DSV (DSV.CO) on Tuesday raised its full-year profit forecast after benefiting from strong freight rates, but said consumer demand and freight rates fell slightly at recent months due to economic uncertainty.

The shipping industry has seen profits soar as strong consumer demand, pandemic-related supply chain bottlenecks and Russia’s invasion of Ukraine caused a skyrocketing freight rates.

But as soaring inflation has consumers wary of spending, demand for freight services has “slowed down” in recent months as air and ocean freight volumes fell in the first half, a declared DSV.

“There is a quiet slowdown, particularly in air and sea volumes, but fares are still high, supply chains are still difficult,” DSV chief operating officer Jens Lund told Reuters.

Freight rates are still four to five times higher than before the COVID-19 pandemic, Lund added.

DSV, the world’s third-largest freight forwarder, reported earnings before interest and tax (EBIT) before special items of 7.5 billion crowns for the second quarter, beating an average of 6.5 billion crowns forecast by analysts in a business survey.

He said he now expects earnings before interest and tax (EBIT) before special items for 2022 to be between 23 billion crowns and 25 billion crowns ($3.16 billion to 3.43 billion), down from an earlier estimate of $21 billion to $23 billion. crowns.

The company’s shares were up 0.5% at 0745 GMT. They have fallen nearly 26% this year due to uncertainty surrounding the global economic outlook.

“DSV is a clear winner in the industry and they will continue their impressive growth going forward through organic growth and acquisitions,” Jyske Bank said in a note.

DSV also launched a 7 billion crown share buyback program on Tuesday, from July 26 to October 4.

($1 = 7.2802 Danish kroner)

Reporting by Nikolaj Skydsgaard; Editing by Christopher Cushing, Sherry Jacob-Phillips and Susan Fenton

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