DFDS has just reported another record result for 2017. The operating profit of DKK2.7 billion was based, among other things, on the continuing positive development in volumes on the Company’s ten freight routes across the North Sea.
In Q4, revenue increased 5% adjusted for non-comparable items. Reported revenue was up 4% to DKK3.5 billion. EBITDA before special items increased 12% to DKK574 million following higher earnings in both the Shipping and Logistics divisions. For the full-year, revenue increased 4% adjusted for non-comparable items. Reported revenue was likewise up 4% to DKK14 billion. EBITDA before special items increased 4% to DKK2,702 million. Full-year profit before special items and tax increased 8% to DKK1,727 million.
Overall, North Sea freight volumes grew by 7% in 2017. In spite of the Brexit issue, and the delayed Brexit agreement between the UK and EU, DFDS see that the UK’s economy is still growing, albeit at a slower pace.
At the moment, DFDS see increasing growth in British exports, which contributes positively to developments on its North Sea routes. To accommodate the expected volume growth over the coming years, DFDS has ordered four new mega ships with a capacity of 475 trailers each for the North Sea traffic. The ships will be delivered from 2019 and onwards from the Jinling Shipyard in China.
The positive development in North sea volumes is also underpinned by some shortage in drivers as trips to UK are not as attractive as they used to be due to the fall of the pound in the wake of the Brexit vote.
This has resulted in some freight forwarders changing from using trucks with drivers to just sending unaccompanied trailers on DFDS’ freight-only ships.
In spite of the challenges Brexit may lead to over the coming years, DFDS can also see opportunities for providing customers with new, valuable, customs clearance services after Brexit, should customs clearance become necessary.
The Group’s revenue is expected to increase around 2% in 2018, excluding acquisitions. The outlook range for EBITDA before special items is DKK2,650-2,850 million (2017: DKK2,702 million). Investments are expected to amount to around DKK1 billion. DFDS is stepping up investment in digital capabilities and increasingly assessing future opportunities offered by new business models and technologies. Going into 2018, trading looks overall robust and the Company foresee that Europe’s growth will mitigate the inevitable uncertainty caused by the Brexit negotiations.
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