News / Contract logistics the star performer as DSV unveils mixed Q2 results

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Contract logistics was the star performer in the second quarter for DSV, reveals the Danish 3PL’s latest round of interim results.

Group-wide, despite a 9% year-on-year increase in revenues, to DKr41.2bn ($6bn), DSV saw EBIT decline 12.4%, to finish the quarter at DKr4.1bn.

The decrease was mainly driven by declines in its ocean and air freight forwarding business, which saw an 18.2% decrease in EBIT, compared with Q2 23, to DKr2.9bn, despite a 7% year-on-year increase in revenue, to DKr24.6bn.

The division’s direct costs, however, rose 14.2%, to DKr18.5bn, while sea freight volumes for the quarter increased 4%, and for the first half by 6%, which the company said was in line with market growth and added that it had yet to see a financial uplift from the Red Sea crisis and higher spot freight rates.

“We expect the market situation around the Red Sea will have a slightly positive impact on the gross profit in H2 24,” it said.

Air freight volumes had outperformed the market, it said, with 10% year-on-year growth in tonnage, compared with Q2 23, while first-half volumes were up 6%, indicating it had won market share during the period.

“The increase was mainly driven by improved exports from APAC, which were positively impacted by growing textile and pharma customer volumes out of China, and sea-to-air conversion in the Indian Subcontinent.

“We estimate that we have grown faster than our addressable market on air freight,” it explained.

Loadstar Premium noted: “In air and sea, DSV said it enjoyed ‘sequential improvement in productivity and conversion ratio in Q2’ and productivity per FTE [full-time equivalent] up by more than 15% in H1 24 compared with last year.”

Despite a difficult market for haulage operators, its road transport division reported growth in both revenues and profits, on the back of winning market share, but limiting its costs.

Second-quarter revenues were up DKr1bn, to DKr10.5bn, accompanied by a 4.4% increase in EBIT before special items, to DKr549m.

“In a competitive market with pressure on the freight rates due to low demand and overcapacity, the road division achieved strong results. We estimate that the division gained market share, especially on European groupage shipments.

“In addition, we have further strengthened the commercial collaboration across the three divisions. The operational interaction is in its first phase across Road and Air & Sea, supporting our efforts to continue to deliver sustainable above market growth,” it added.

Meanwhile, despite being the smallest of its three divisions, Solutions – DVS’s term for its contract logistics operations – outperformed road and freight forwarding, delivering a 6.1% year-on-year increase in EBIT, to DKr661m, on the back of a 17.3% increase in revenues, to DKr6.9bn.

The growth came following a period of speculative warehouse development, which continued in the second quarter and has left DSV poised to win further market share, as shippers increasingly look to outsource warehousing and distribution activities.

“In Q2 24, we continued executing on our long-term strategy of consolidating and developing multi-client warehouse campuses based on regional roadmaps. In Q2 we have added new warehouse space, predominantly in Sweden and North America.

“While these efforts have resulted in continued above-market growth, there is a ramp-up period for new warehouses.

“As part of DSV’s overall commercial strategy, we continue to develop our vertical expertise and aligning our services globally in pursuit of global customers… we saw a positive development in cross-divisional collaboration with our largest customers and overall increased customer satisfaction rates across all customer segments,” it said.