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DSV ended the first three months of 2017 with a 174% year-on-year increase in pre-tax profits, with both road and air and sea divisions outpacing average market growth.

Revenues for the three months to March hit Dkr18.2bn ($2.6bn), up from 2016’s $2.2bn, equating to year-on-year growth of almost 19%, and profits before tax of $128m compared with $46.7m a year earlier.

Chief executive Jens Bjorn Anderson said the performance did not appear to have been driven by any particular vertical or sector, but rather was the result of a strong quarter.

“A very strong set of first-quarter numbers brings us even closer to our goal of reaching pre-UTi performance levels and margins,” said Mr Anderson. “All three divisions have recorded significant increases in earnings, which is very satisfactory.”

The group’s air and sea freight volumes obliterated market growth, with volumes carried by air up 20% against a market average of 6%, while teus increased 17% against a market average of 4%.

“The positive developments are largely the result of the continued successful integration of UTi’s activities, with synergies being realised according to schedule,” said a statement from DSV.

“And in several countries we are already seeing productivity and profits per shipment back at pre-UTi levels, while the acquisition has boosted our presence in new regions.”

The company said the UTi acquisition had also sparked growth in South Africa, Mexico, Israel and India – areas it claimed were delivering strong financials.

Mr Anderson described the air freight division’s performance as “unusually strong”, noting that some of the success may have been driven by difficulties in global sea freight markets.

Healthy volume growth had also fed into strong profits, with the division posting a 66.8% year-on-year increase in earnings before interest and tax (EBIT), up from $60.6m to more than $101m.

The division’s conversion ratio also increased, up from 22.1% to 32.6%, with the company noting the benefit of an extra month of UTi activities compared with last year and increased freight rates.

However, Mr Anderson said conversion rates for the air and sea division – as well as road – had yet to meet the long-term targets.

“So we will continue to try and improve these,” he added. “That said, I must say air and sea is growing fairly fast and we are happy with the performance here. Furthermore, it seems the momentum generated is carrying into the second quarter.”

Mr Anderson added that synergies from DSV’s purchase of US logistics provider UTi Worldwide last January were particularly felt by air and sea and, albeit less so, by the road and solutions divisions.

Road freight shipments increased at a rate four times (12%) faster than market average (3%), with the company’s management estimating growth of market share in most regions. The increase in road volumes bolstered net revenue for the division, which was up 14.1% year-on-year to $1.1bn, driving EBIT to $55.3m, equating to annual growth of 72%.

Again, the company attributed some of this growth to UTi activities, particularly in the US and South Africa.

Mr Anderson said the company’s European road freight volumes had grown 8% year-on-year, but admitted the additional month of UTi probably accounted for 2% of that.

“Nonetheless, this still amounted to true organic growth of around 6% year-on-year, which is substantial for road haulage, and again well above market averages [around 3%],” he added.

Not wanting to spoil the party, the contract logistics division (DSV Solutions) also reported healthy results for the three-month period, with revenue increasing 31% year-on-year to $392m.

EBIT was up by more than 44% to $9.6m, again largely driven by increased activities from integrating UTi – the Americas, Asia Pacific and South Africa achieved the highest growth rates in this division.

When asked if the company’s overall performance was driven by an optimistic global tone of business, Mr Anderson said while DSV was not an economic specialist, it did appear to be going well.

“There are of course some geopolitical issues, but there does seem to be something in the air,” he said. “But maybe the positivity is influenced by something company specific.”

You can see the full results here.

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