DSV’s Upside Profit Surprise Amid Logistics Weakness


The 1Q 2023 results beat BNA, but continue to show the weakness of the logistics sector Guidance unchanged.

Main figures vs. consensus (Bloomberg): Revenues DKK 40,954m (-32.9% y/y) vs DKK 43,274m esp.; EBIT DKK 4,672m (-28.2% YoY) vs DKK 4,170m esp. and BNA 3,287M DKK (-25.1% YoY) vs 3,016M DKK esp. Announces a new share buyback program over the next three months for a total value of DKK 4.5bn. Finally, it maintains an EBIT in 2023 in the range 16,000/18,000M DKK vs 17,110M DKK expected by the consensus.

Opinion of the Bankinter Analysis Team

Mixed figures. The results are positively surprising in terms of profit, despite the fact that inflationary pressures, the progressive normalization of logistical disruptions and inventory adjustments (overdemand during the pandemic and fear of a current recession) have a full impact on the company’s Revenues. They disappoint by falling more than expected, as a result of the decrease in volumes and the drop in the price of freight and transport rates. By divisions, a moderation is appreciated in all.

Only Land Transport remains positive (+0.1% y/y), the same as last quarter, while Maritime and Air Transport and Logistics Solutions fall (-42.9% and -8.1% respectively).

The guides show weakness (16,000/18,000M DKK vs 25,204M DKK 2022) but are at levels expected by the market. The normalization of the tensions in the sector, the fear of a recession and the existing inflationary pressures are expected to continue weakening the demand and causing falls in rates until 2H 2023. An improvement in guidance is likely in the next quarter, when there is more visibility on the evolution of the economy and the rate of moderation of inflation.

In short, we expect a slightly positive impact in the session, awaiting the comments that DSV can make today regarding the interest in the acquisition of DB Schenker, the logistics subsidiary of the Deutsche Bahn railway company (valued at a maximum of 20,000M €). DB Schenker is majority owned by the German state and is one of the largest logistics operators worldwide. Other companies that would be interested in the operation are Deutsche Post and Kuehne+Nagel. It would mark the eighth purchase of the group (the last were the most important: 2019 Panalpina and 2021 Agility GIL) and would complement the segments in which DSV is already present.

This article is originally published on consensodelmercado.com


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