DSV air revenues reach $687M in Q2

Danish forwarder DSV reported a 64% year-over-year increase to DKK 5,052 million (US $686 million) in gross-profit airfreight revenues for Q2. While most verticals did well during the quarter, airfreight volumes were primarily driven by high-tech and pharmaceutical shipments, Michael Ebbe, chief financial officer at DSV, said on Tuesday’s Q2 earnings call. Overall, airfreight’s high yields were attributed to the general market situation, inflation costs and benefits from Agility’s Global Integrated Logistics Unit (GIL) integration, DSV reported. [caption id="attachment_57131494" align="aligncenter" width="1024"] Source: DSV Q2 2022 earnings presentation[/caption] DSV’s warehouses are also packed, according to the call. “There’s no capacity available in the market, and, of course, all our facilities are also full and the inventory levels are high,” Chief Operating officer Jens Lund said during the call. “They are high due to two things: People have stocked up or increased the stock levels, but also because of business continuity plans. We see that customers want to hold more inventory in order to be confident that they can operate with these bottlenecks that we see in the supply chain in general.” Like Q1 , market growth in the second quarter continued to be impacted by the COVID-19 lockdowns in Shanghai , however DSV was unable to quantify how the closures have impacted the forwarder’s overall cargo activity, Chief Executive Jens Bjorn Andersen said during the call. “Freight rates have declined a little bit, but they remain very elevated as a result of the supply chain disruptions, but also as a result of the very high fuel prices ,” he said. Overall, DSV’s air volumes declined by roughly 1% in H1, but remained above estimated market growth, according to the report. Meanwhile, the return of passenger summer travel has increased airfreight capacity, specifically on trans-Atlantic routes . Belly capacity on routes to and from Asia, however, remain strained. While congestion is still prevalent in northern Europe and Asia, overall it is “more or less the same but not centered around the U.S. West Coast anymore,” Andersen noted. Labor challenges in Germany have also contributed to congestion issues, however DSV expects European congestion to ease going into Q3. DSV’s other sectors, including Sea and Road, also showed growth in Q2, with total gross profit reaching $1.9 billion, up 61.5% YoY, according to the report. For Jan. 1 through June 30, profit stood at $3.66 billion. 2022 outlook DSV expects a softer outlook for the rest of the year despite a strong first half, according to the earnings call. “When we look into the second half of the year, we have seen some soft development in the volumes,” Ebbe said. “We also read the analysis and news coming from all over the globe [and] that has led us to guide for an updated outlook between $3.13 billion to $3.4 billion … Not as strong as the first half of the year, a little bit softened taking the uncertainties and the expected development into consideration.” Meanwhile DSV’s secured capacity through its charter network has helped with air volumes, Ebbe added. DSV ranked No. 3 in Air Cargo World ’s Power 25 ranking of the world’s top freight forwarders, based on 2021 tonnage.

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