DSV’s Q3 earnings, volume growth up with UTi integration

Danish freight-forwarder DSV is continuing to reap the benefits of last year’s acquisition of U.S.-based 3PL UTi Worldwide, as the integration of its operations with DSV’s pushed up the company’s earnings before income and taxes (EBIT) for the third quarter by 34.4 percent, year-over-year. Airfreight tonnage also rose 11.7 percent over the same time period.

Overall air cargo volumes rose from 147,744 tonnes in the third quarter of 2016 to 165,051 tonnes in Q3 2017, while EBIT growth for the air and sea segment during the quarter increased 49.4 percent, y-o-y. Third quarter growth outpaced overall 10.8 percent volume growth for the first nine months of 2017. as CEO Jens Bjørn Andersen said the company’s growth is “back on track” after efforts to integrate UTi into its business slowed growth earlier in the year. 

DSV noted that synergies from the UTi acquisition have emerged sooner than expected in 2017, and subsequently revised its outlook for the remainder of 2017, with the expectation of operating profit of between US$737 million and $768 million, up from the $706 millon to $737 million that was previously expected.

The forwarder saw particularly strong improvement in the U.S. and Asia-Pacific regions, while Europe has also strengthened. However, the double-digit growth is unlikely to continue into the fourth quarter, according to Andersen.

After the strong growth of Q4 2016, “comparisons will be difficult,” said Andersen. “To be cautious, it’s fair to assume we could see growth rates slightly below double-digits in Q4 and onward,” he added.