DFDS, the listed Danish ferry and logistics group, has raised its full-year operating profit forecast after cutting net loss in 1Q15 on economic recovery on its key markets and cheaper bunkers, the company said in a statement.
Group net loss narrowed to DKK23 million (USD3.4 million) in 1Q15 from DKK123 million in the same period last year, while revenues rose to DKK2.93 billion from DKK2.82 billion. The first quarter is often the weakest of the year for ferry companies due to weak passenger business.
“Overall economic activity started to pick up in 1Q15 with support from monetary easing in the EU and a lower oil price compared with 2014. The appreciation of the British pound started to have some impact on trade patterns between the UK and the continent and Scandinavia. The UK economy remained strong in the quarter,” the company said.
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Price pressure has eased somewhat following a gradual improvement of capacity utilisation in northern European transport markets. Passenger volumes and pricing improved in most markets in 1Q15.
The performance of the shipping activities that entail about 50 vessels improved in most areas in the quarter, driven by growth in volumes, unit revenues and positive impacts from the continuous optimisation of the route network, including higher capacity utilisation. “The performance of the logistics activities also improved in most areas driven by both organic growth and more efficient operations,” DFDS added.
“Our strategy of customer focus and continuous improvement produced a strong first quarter. The improvement was supported by growth of varying strength in northern European markets. Russian market demand is, however, declining and we are benefiting from the steps we took last year to reduce our exposure to this market,” Niels Smedegaard, CEO, said in the statement.
“On the back of the 1Q15 result and expectations of continued growth above our initial expectations for 2015, we raise the outlook for EBITDA before special items to DKK1.65 billion to DKK1.75 billion from previously DKK1.55 billion to DKK1.65 billion.” In 2014, the group’s EBITDA amounted to DKK1.43 billion.