The Danish shipping and logistics company DFDS is preparing for somewhat tougher times. Its earnings forecast has been revised downward, and a planned acquisition for the Turkish market has also been cancelled.
DFDS has now announced that the transaction with Ekol Logistics announced in April will not go ahead.
This involved, among other things, the takeover of Ekol Logistics’ international transport network, which transports goods between Turkey and Europe via its own offices and facilities in ten European countries.
The completion of the transaction was made dependent on “official approvals and certain contractual conditions” at the time. And this is apparently where the problem lies: “As certain contractual conditions were not met within the agreed period, DFDS has terminated the share purchase agreement and the transaction will therefore not take place,” according to a statement from the Danes. No further details were initially provided.
DFDS expects more difficult market conditions
However, another announcement suggests that the overall market situation is no longer considered to be so good: DFDS, for example, revised its own EBIT forecast range after results fell short of expectations. The main reasons given for this are a “more extensive slowdown in Europe than previously expected as well as increased competition in the Northern European land transport markets and the market for freight ferries in the Mediterranean”.
Management now expects the current market conditions to continue for the rest of the year, whereas previously a recovery in activity had been expected for the remainder of the year. As a result, the EBIT outlook for 2024 has been lowered to DKK 1.5 to 1.7bn – previously it was expected to be “DKK 1.7 to 2.1bn”. The outlook for revenue growth in 2024 has changed to 8-10% from previously 8-11%, as Ekol Logistics’ revenue was previously included in the revenue outlook.
