Danish shipping and logistics company, DFDS, swung back into the black during the second quarter, posting a DKK 288 million ($42.5 million) profit for the period. This is a welcome sign from the company, following a DKK 48 million (USD 6.9 million) net loss in the first quarter. 

Furthermore, DFDS has reported a 10.9 per cent increase in revenue to DKK4.6 billion ($730 million) for the second quarter of 2024 compared to last year. However, adjusted EBITDA declined by 8.1 per cent to DKK990 million ($156 million).

The company attributed the revenue growth to higher passenger volumes and increased spending on the Channel route. Freight ferry revenue remained stable despite higher volumes due to lower rates in certain markets.

The logistics division experienced a more challenging quarter, with EBITDA falling 13.8 per cent to DKK289 million ($45 million). The decline was primarily due to underperformance in the Nordic Cold Chain business unit and lower activity levels in Belgium and the Netherlands.

DFDS expects the logistics division to continue facing challenges in the third quarter but anticipates an improvement in the year’s final quarter. The company remains optimistic about its overall performance for 2024, forecasting EBITDA to be higher than the previous year.

“Q2 turned out to be more challenging than expected and we consequently revised the earnings outlook for 2024 while maintaining the adjusted free cash flow outlook,” DFDS CEO Torben Carlsen, said. “The top priorities for the rest of the year are to continue to protect our key ferry market positions and turn Logistics’ earnings trend around.”

Outlook

DFDS has lowered its full-year earnings forecast as Europe’s economic outlook weakens and freight market conditions remain challenging. The company now expects EBITDA to reach between DKK1.7 billion and DKK2.1 billion ($267 million – $331 million) for 2024, down from a previous forecast of DKK2.0-2.4 billion.

While the company anticipates organic growth in freight ferry volumes, this is expected to be offset by lower freight rates and increased costs. Additionally, the logistics division faces ongoing margin pressures due to overcapacity in the haulage market.

Despite these challenges, DFDS expects passenger volumes to grow, driven primarily by the Channel route. The company’s recent acquisition of Ekol Logistics is expected to contribute to revenue growth in the second half of the year.