Wallenius SOL snaps up UK ro-ro operator Mann Lines
PRESS RELEASE: Swedish shipowner Wallenius SOL, a 50% shareholder of ro-ro giant Wallenius Wilhelmsen, has ...
HD: DIY RE-PRICINGZIM: A RISING TIDE LIFTS ALL BOATSTSLA: CHINA THREATDAC: KEY REMARKSDAC: SURGING GM: SUPPLY CHAIN WOESMAERSK: ROTTERDAM TEMPORARY SUSPENSION OF OPERATIONSATSG: OWNERSHIP UPDATERXO: COYOTE FILLIP GONEGM: SUPPLY CHAIN HITBA: CUT THE FAT ON THE BONER: STEADY YIELDMAERSK: SELL-SIDE UPDATESDAC: TRADING UPDATE OUT SOONTSLA: FEEL THE PAIN IN CHINAWMT: GUESS WHATXPO: SURGINGAMZN: LOOKING FORWARD
HD: DIY RE-PRICINGZIM: A RISING TIDE LIFTS ALL BOATSTSLA: CHINA THREATDAC: KEY REMARKSDAC: SURGING GM: SUPPLY CHAIN WOESMAERSK: ROTTERDAM TEMPORARY SUSPENSION OF OPERATIONSATSG: OWNERSHIP UPDATERXO: COYOTE FILLIP GONEGM: SUPPLY CHAIN HITBA: CUT THE FAT ON THE BONER: STEADY YIELDMAERSK: SELL-SIDE UPDATESDAC: TRADING UPDATE OUT SOONTSLA: FEEL THE PAIN IN CHINAWMT: GUESS WHATXPO: SURGINGAMZN: LOOKING FORWARD
DFDS has announced that it expects increased competition on the Turkey-Italy ro-ro trade in the final quarter of last year, along with costs associated with its acquisition of Turkish transport EKOL, are set to cost the Danish firm around Dkr500m ($70m) in lost profitability this year.
In September, Italian ro-ro operator Grimaldi Lines launched an Trieste-Ambarli (Istanbul’s main port area) ro-ro link with two sister ships – the Eco Mediterranea and Eco Malta – each capable of carrying 500 trailers, deployed to offer two departures a week from each port.
The route was triangulated in October with the addition of a call at the Greek ro-ro port of Patras.
In a trading update to the Copenhagen Stock Exchange, DFDS said that it continued to expect to report 2024 revenues of Dkr28.9bn, a 9% gain on 2023, and a full-year EBIT of Dkr1.5bn when it publishes its latest full-year report in early February.
However, it added that its outlook 2025 had been affected by the “Mediterranean’s changed competitive environment” as well as the “planned turnaround of the Turkey & Europe South business area”, which largely comprises the EKOL international transport businesses, and was subsequently expecting to book an EBIT of Dkr1bn this year, a 30%-plus decline from 2024.
In a call with analysts, DFDS CEO Torben Carlsen added that previous guidance, which targeted leverage at 2.5x by end 2026 and 10% ROIC [return on capital invested] and Dkr1.5bn in free cash flow, was also “no longer applicable”.
Mr Carlsen told analysts that around 75% of the lost profits would be due to the entrance of Grimaldi, with the remaining 25% due to EKOL turnaround costs.
“The new competitive situation in Turkey is in our view a permanent one, and therefore we need to make sure that we offer the right capacity so that supply and demand in the market are in balance. That’s what we are going to do in 2025.
“We will adjust our capacity to the new situation, and typically after we have done that we have better pricing power – that’s happened in other markets such as the Channel at other times – and we have an expectation that we will see the same thing in Turkey,” he added.
Meanwhile, EKOL is hoped to break even by the end of the year, he said.
Chief financial officer Karen Boesen said the company was also considering the sale of non-core assets to mitigate the losses and ease its debt.
“This could include the sale-and-leaseback of vessels, the sale of trucks, even the sale of vessels if we consider a route to be non-core to the network,” Mr Carlsen explained.
“But mostly it will focus on the assets – for example, we have inherited a very large truck base in Turkey, and we expect a reduction in that and a change in the business model where we rely more on subcontractors and freight forwarders rather than owned transport for volumes,” he said.
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