DFDS CEO: Europe’s Growth Will Ease Brexit Talks Uncertainties
- Business & Finance
2017 was a record-setting year for Danish shipping and logistics company DFDS, the firm said, having reported 4 pct higher revenue and 8 pct rise in full-year profit before tax which stood at DKK 1.7 billion (USD 277 million).
The better performance was driven by the continuing positive development in volumes on the company’s ten freight routes across the North Sea.
“We are very pleased to present another strong result ending a year of steady progress. It’s a great platform for further development of our business. We are stepping up investment in our digital capabilities and increasingly assessing future opportunities offered by new business models and technologies. Going into 2018, trading looks overall robust and we foresee that Europe’s growth will mitigate the inevitable uncertainty caused by the Brexit negotiations,” says Niels Smedegaard, CEO & President of DFDS.
“Overall, North Sea freight volumes grew by 7 pct in 2017. In spite of the Brexit issue, and the delayed Brexit agreement between the UK and EU, we see that the UK’s economy is still growing, albeit at a slower pace. According to the UK government’s official prognosis, growth is expected to continue at just over 1 pct in 2018. At the moment, we even see an increasing growth in British exports, which also contributes positively to our developments on our ten North Sea routes,” Smedegaard added.
To accommodate the expected volume growth over the coming years, DFDS has ordered four new mega ships with a capacity of 475 trailers each for the North Sea traffic. The ships will be delivered from 2019 and onwards from the Jinling Shipyard in China.
The positive development in North sea volumes is also underpinned by some shortage in drivers as trips to UK are not as attractive as they used to be due to the fall of the pound in the wake of the Brexit vote. This has resulted in some freight forwarders changing from using trucks with drivers to just sending unaccompanied trailers on DFDS’ freight-only ships.
“In spite of the challenges Brexit may lead to over the coming years, we can also see opportunities for providing our customers with new, valuable, customs clearance services after Brexit, should customs clearance become necessary. We are located in the ports and have experience with this from our UK to Norway service,” Smedegaard noted.
With regard to the outlook for 2018, the group’s revenue is expected to increase around 2 pct in 2018, excluding acquisitions. The outlook range for EBITDA before special items is DKK 2.650-2.850 billion (2017: DKK 2.702 bn). Investments are expected to amount to around DKK 1.1 bn.