DFDS Closing Loss-Making Route

Danish-based DFDS has started consultations with French unions about plans to close the Le Havre-Portsmouth route at the end of 2014, DFDS said on Monday, attributing the decision to continued losses.

The route is part of DFDS’ business unit France & Mediterranean.

The route carried 185,000 passengers and 480,000 lane metres of freight in 2013 generating revenues of DKK 165m. The route is serviced by a time-chartered ro-pax ship, including crew, which will be redelivered to its owner at the end of 2014.

“A number of initiatives to improve the route’s financial performance since the route was taken over from Louis Dreyfus Armateurs in 2012 have had limited effect. Given the unsatisfactory financial results, the measures already taken and the new sulphur emission rules coming into force on 1 January 2015, the route does not have a viable future,” DFDS said.

A closure of the route will primarily entail redundancy costs for shore staff which are expected to amount to around DKK 15m and be recognised in the income statement as a special item.

 DFDS said that for the group, special items for the full-year 2014 are now expected to amount to a cost of DKK 50m from previously a cost of DKK 35m, whereas the full-year outlook would remain unchanged. 

Earlier in August, DFDS decided to suspend the newly launched service between Travemünde in Germany and Klaipeda in Lithuania amid dropping freight volumes on the route caused by the current trade dispute between the EU and Russia.