News / Scan Global H1 revenues up, but will be cutting costs in a 'volatile H2'

© Brett Hondow

Scan Global Logistics (SGL) has warned that the second half of the year will be characterised by “highly volatile and unpredictable demand, and continued margin pressure”, and told investors it would embark on a cost-cutting plan. 

It warned of a volatile H2 after it announced a strong set of Q2 numbers in air and ocean, which it attributed to front-loading and M&A in Brazil, Italy and Canada – but overall losses.  

The first half saw revenues grow 24%, to €1.26bn ($1.46bn), while gross profit rose 16%, to €275m. Ebitda before special items was up 13%, to €94m. Q2 saw 17% growth in both revenues and gross profit. 

Allan Melgaard, global CEO and co-founder, said the rises were “driven by higher volumes and effective utilisation of our network, although higher costs for integration and capacity building affected the conversion ratio”.  

He added: “Our commercial momentum, especially in EMEA and Asia, confirms the value of local execution and close customer engagement. However, it is important to note that Q2 was significantly impacted by front-loading of volumes, particularly related to the US tariff situation. This has inflated activity levels in the quarter, while underlying year-to-date airfreight development remains negative.” 

Mr Melgaard noted that “the global market is increasingly characterised by unpredictability; fluctuating freight rates have triggered rapid shifts between transport modes, especially driven by uncertainty regarding US tariffs. Front-loading in Q2 is expected to dampen demand in Q3 and Q4, adding further uncertainty.” 

Despite the rise in gross profit, SGL made a €30m loss in Q2 after a €54m loss in the first half, with ‘financial items’ nearly doubling from €42m in H1 24 to €80m, “impacted by negative foreign exchange rate, driven by the development in the US$, particularly impacting Q2 negatively. Moreover, bond interests impacts negatively, though on par with last year”. 

Scan said it was now focused on cost-cutting, like its Danish compatriot DSV.  

“Year-to-date, we have onboarded new colleagues and increased our FTEs by 26%, both organically and through M&As; thus, SG&A costs were 17% higher than in H1 24,” said the company. 

“Consequently, we will take relevant measures considering the current market situation and initiate reduction of our current cost base to mitigate the uncertainties in the market.  

“SGL has in recent years remained committed to its strategy and deliberately kept our current staff levels to be able to act agile and to manage the increased complexity of shipments. However, the geopolitical turmoil have impacted activity and margins to a larger extent than expected and, combined with the uncertain time ahead, various cost-saving initiatives are necessary, to reduce our SG&A costs. The conversion ratio was 34.2% in H1 25, hence 0.7%-points lower than H1 24 due to the higher SG&A costs.” 

In air, volumes rose 15% in Q2 over a year earlier, to 52,000 tonnes, while ocean volumes rose 38%; the division saw revenues grow 27% in the first half over the year before, to €1.13bn. The rise was attributed to “increasing tariffs from the US, which has resulted in customers frontloading freight to the US, impacting mainly the Asia-transpacific tradelane with lower margin volumes and highly inflated volumes in Q2, due to immediate higher rates coming from capacity constraints”.  

Source: SGL

“Q2 25 was in particular impacted by the highly fluctuating customer demand and capacity adjustments, and constant shifting in transport modes from ocean to air and back again.” 

SGL said it had seen “muted organic growth, but soft increased activity, primarily in EMEA and Asia”, while it had also increased its customer base, but margins were under pressure. 

Meanwhile, the latest data from Armstrong & Associates saw SGL propelled into the top 20 airfreight forwarders for the first time last year, after roughly doubling its volumes in the last five years. 

Ocean growth was also driven in part by acquisitions, including Blu Logistics in Brazil. 

“Both Asia and North America experienced increased volumes impacted by the uncertainty of tariffs during Q2; however, we do not expect these as sustainable volumes, hence we expect pressure on activity and margins in the remainder of 2025.” 

SGL added that it had seen a lot of modal shift in H1. 

“We navigated through what seemed like a general shift from air to ocean volumes in Q1, driven by the decline in ocean rates, thus increased ocean freight shipments. The sudden demand caused ocean rates to increase during Q2. This trend, combined with the ongoing disruption in the Red Sea and the US tariffs situation, caused some customers to convert back to air mid-Q2, and back again to ocean end-Q2 – a quarter characterised by volatility in the market.” 

In Road, gross profit fell 19%, to €13m. It said: “Activity remains challenged, with muted freight demand, hence decreasing freight rates, resulting in flat volume growth expected through the rest of 2025. The current tariff situation has highly impacted the business in our North America division with lower-than-market freight spending.” 

SGL had also noted the fallout from market consolidation, most likely DSV’s purchase of DB Schenker.  

“We also experienced intensified competition following industry consolidation, putting additional pressure on margins across several markets. These factors mean that we enter the second half of the year with an outlook for highly volatile and unpredictable demand and continued margin pressure.” 

However, it said: “Despite the challenging market conditions, we maintain our outlook for Ebitda before special items of €215m – €235m.”

Loadstar Premium today looks at the future for SGL – and how long its private equity owner, CVC Partners, may want to stay invested. You can also read Premium’s coverage of SGL’s first-quarter 2025 here, and see the full results from SGL here.