The Danish ferry operator DFDS has had a good third quarter. However, despite improved results and a more positive outlook, CEO Hansen expressed his dissatisfaction.
DFDS has continued to improve in recent months. Turnover rose by 6% to DKK 8.8 billion (approx. €1.18 billion). Operating profit (EBIT) grew by as much as 28% to DKK 685 million (€91.6 million), whilst adjusted free cash flow stood at DKK 205 million (€27.4 million). Both divisions – Ferries and Logistics – contributed to this, with a marked improvement particularly evident in the Logistics division. EBIT rose by DKK 86 million in the last quarter to DKK 108 million (€14.4 million).
For the full year, DFDS now expects a slight improvement in revenue growth; the shipping company has narrowed its forecast from 3 to 5% to 4 to 5%. The expected EBIT remains unchanged at DKK 1.2 to 1.4 billion (equivalent to approximately €160 to 187 million). Free cash flow, on the other hand, is set to grow significantly, from DKK 500 million to between DKK 800 million and DKK 1 billion.
“We are in the midst of a multi-year transformation process that requires disciplined execution and a strong focus on financial results,” said Michael Hansen, the company’s CEO. “The significant improvement in results in the Logistics division underlines our targeted efforts to strengthen the underlying business with the help of our ‘Boost Project’ turnaround model. At the same time, we have further consolidated our financial strength thanks to strong cash flow.”
However, Hansen described the overall result as “unsatisfactory”. He attributes this to the two business units, “Mediterranean“ and “TES“, both of which operate out of Türkiye. Unlike the rest of the DFDS network, both are facing “significant market challenges“, according to Hansen. “These challenges continue to weigh noticeably on the Group’s results.” To improve performance, the shipping company is applying its “Boost Project“ to TES, whilst the capacity and pricing model for the Mediterranean division are being continuously adjusted.
“Significant potential for improvement”
According to Hansen, the improvement in the logistics sector is testament to “the expertise and commitment of our staff across the entire business unit” and demonstrates the effectiveness of the “Boost Project”, through which the shipping company is overhauling its entire business model. “There remains significant potential for further improvements in this area,” said the CEO. “The ongoing strategic review will determine our future strategic priorities and capital allocation. The aim is to focus our resources on increasing value for all our stakeholders – both in the short and long term.”
“DFDS is undergoing a multi-year transformation process that requires disciplined implementation and a strong focus on achieving outstanding financial results,” concluded the CEO. “To strengthen our transformation capabilities and ensure clear accountability for this process, we are expanding the Executive Management Team to include a Chief Transformation Officer. This person will lead the implementation of the strategy and drive the transformation process across the entire DFDS Group.”
