Brexit boost confirmed as DFDS reports first quarter figures
By Grimsby Telegraph | Posted: 9 May 2019
DFDS has revealed how trade between Europe and the UK was up 7 per cent in the first two months of 2019, as businesses stockpiled ahead of the first potential hard-Brexit date.
The North Sea routes proved extremely fruitful, with a Government contract win clicking in immediately after the reporting period, for the whole of April. A six month agreement, it was scrapped after the first month, with a cancellation payment made by Whitehall.
It came against a backdrop of modest growth across the continent for the shipping and logistics giant, which has its UK headquarters and dedicated terminals anchored in Immingham. Bosses reported the busiest week in the terminal's history in the run-up to March 29, with goods shipped ahead of potential customs changes and tariff charges.
Strong results were also reported in cold chain logistics, with the purchase of Grimsby seafood transportation business Quayside proving its worth. Food carrying is now the strongest element of that business division.
Torben Carlsen, recently appointed as chief executive after Niels Smedegaard stepped down after 12 years, said: “In quarter one, revenue increased 11 per cent to DKK 3.9bn (£449 million) driven by the expansion in the Mediterranean (it acquired a Turkish operator) and stockpiling in UK ahead of the initial Brexit date end of March. The Easter timing difference vs 2018 lowered passenger revenue.
“EBITDA before special items for Q1 increased 13 per cent to DKK 677m (£78 million) driven by the Mediterranean expansion and strong performance in North Sea.
“Logistics continued to improve performance in UK & Ireland.”
DFDS’s outlook is unchanged for revenue growth of 10-12 per cent.
Mr Carlsen said: “European growth continued to be modest in Q1 2019, although trade between UK and continental Europe picked up ahead of the initial Brexit date end of March.
"The postponement of Brexit for potentially six months entails unchanged low visibility on the final outcome and timing of Brexit. Consensus estimate on European real GDP growth is now around 1.2 per cent for 2019.
"The total trading volume of goods between UK — a major market for DFDS — and the rest of Europe increased as both UK import and export volumes were up 7 per cent in the first two months of 2019.”
The annual meeting in March approved a dividend of DKK 4 (46p) per share as proposed by the board.
Looking at “major events after quarter one,” Mr Carlsen added: “The UK Department for Transport notified DFDS on May 1 that they wished to terminate the agreement to provide additional ferry capacity between UK and continental Europe.
"The agreement commenced on 29 March 2019. DFDS will receive a cancellation fee in accordance with the agreement to cover costs incurred in ensuring availability of capacity for the six-month duration of the agreement.”