Market share gains boost DSV Q32022 income up 15% to $7.9bn
DSV to buyback DKK 3 billion ($390 million) shares followed by another buyback of DKK 4 billion ($520 million)
Good performance across divisions and market share gains across most business areas saw DSV report a15 percent increase in revenue to DKK 60.6 billion ($7.9 billion) for the third quarter ended September 30, 2022.
The integration of Agility GIL is now successfully completed, and the Q3 results are the first interim financial results to overlap with the integration, says an official release.
Jens Bjørn Andersen, Group CEO, DSV
"We are very pleased to report a strong set of results for Q3 2022 and for the first nine months of the year," says Group CEO Jens Bjørn Andersen. "All three divisions continued the good performance with growth in earnings and market share gains across most of our business areas. The global economic uncertainty has increased, but we have great trust in our flexible business model, which enables us to quickly adapt to changes."
"In the first nine months of the year, gross profit grew by 50 percent, EBIT before special items grew 75 percent and adjusted free cash flow more than quadrupled compared to the same period last year," says an official release.
"Air & Sea achieved an 81 percent increase in EBIT before special items, Solutions achieved a 104 percent EBIT increase and Road achieved a 18 percent EBIT increase for the first nine months of 2022."
Air freight volume down marginally
Volume declined 3 percent to 376,000 tonnes for Q32022 from 387,000 tonnes in Q32021. For nine months, volume was down 11 percent compared to market decline (estimate) of 6-8 percent.
"Weaker demand was more than compensated by strong yields," according to the management commentary release along with the results. "Excluding GIL impact, DSV's volumes declined approx. 10 percent in Q32022. This was better than the estimated market growth. Available capacity has increased as belly-space capacity on passenger planes has gradually returned. Freight rates have declined but remain elevated, partly due to high fuel prices."
Air gross profit increased 35 percent to DKK 4.8 billion ($624 million) for Q32022, and was up over 53 percent to DKK 14.5 billion ($1.9 billion) for nine months ended September 30, 2022.
Sea freight volume drops, yields improve
Freight volume improved 7 percent for Q32022 to 681,000 TEUs while it was up 14 percent for nine months to September 2022.
"Weaker demand was compensated by continued strong yields," says the management commentary.
"No real peak-season in Q3 2022, and soft volumes on Asia-Europe and Asia-North America trade lanes. Excluding estimated GIL impact, DSV volumes declined approx. 4 percent in Q32022 and were on level with the estimated market development. Weaker demand and easing port congestion have led to over-capacity and declining spot rates."
Share buyback
DSV will launch a new share buyback programme of up to DKK 3 billion ($390 million), and will be concluded no later than November 14, 2022, the release said. "A second share buyback programme of up to DKK 4 billion ($520 million) will be launched on 15 November 15, 2022. The buyback will be concluded no later than February 1, 2023."
Outlook
DSV has upgraded the full-year outlook range for 2022. EBIT before special items is expected to be in the range of DKK 24.5-25.5 billion (previously DKK 23-25 billion).