Strong demand sees DSV upgrade 2022 earnings outlook

Based on the strong performance in Q12022 and expectations for the remainder of the year, DSV has upgraded the 2022 outlook for earnings before special items by 16 percent to be in the range of DKK 21-23 billion (previously DKK 18-20 billion) (to $3.2 billion from $2.8 billion).

"Uncertainty related to the global economy has increased in recent months but DSV expects continued disruptions of global supply chains to support high demand for its services," an official statement said.

DSV reported strong Q1 results with growth and high productivity across all three divisions. "The performance in the Solutions division was outstanding in Q1. The division's EBIT growth of close to 200 percent, driven by strong gross profit growth and continued cost discipline, confirms the long-term strategy of consolidation into large, multi-client campuses and continued investments in warehouse automation. Additionally, the GIL integration contributed strongly to the division's result. The Air & Sea division reported an EBIT growth of 109 percent, while the Road division steered through the disruptive market conditions with 24 percent EBIT growth compared to the same period last year."

Revenue increased over 80 percent to DKK 61 billion ($8.5 billion) and gross profit came in at DKK 13 billion ($1.8 billion).

The integration of Agility's Global Integrated Logistics (GIL) is progressing according to plan, and final completion is expected in Q32022. In line with previous announcements, GIL is expected to contribute at least DKK 3 billion ($420 million) to the combined EBIT before special items on an annual basis. Around 85 percent of the EBIT contribution is expected to impact the income statement in 2022, and DSV expects full-year impact in 2023, the statement said.

"For Q1 2022, we report a strong set of results, with earnings growth across all divisions and a strong cash flow," says Jens Bjørn Andersen, Group CEO, DSV. "We are tracking the plans for the GIL integration and are on track for completion in Q3 2022. The markets continue to be impacted by tight capacity and congestion, and in March we saw the return of Covid-19 lockdowns in China - a reminder to us all that the pandemic is still not over.

"The difficult situation in Ukraine is on everyone's mind. DSV shipments to and from Russia and Belarus have stopped, except certain humanitarian shipments, and we are in the process of divesting and exiting our activities in Russia. The direct financial impact is not material as the combined revenue in Ukraine, Russia and Belarus represents less than 1 percent of the Group's revenue. Still, the situation has impacted the markets negatively in several ways, especially for air and road transports, and we continue to do our best to find capacity and alternative solutions for our customers."