DSV’s Road division drives organic growth

DSV has announced revenue growth of 4.2% in the first nine months of 2011; this was mainly attributable to its Road division. The company’s total revenue reached DKK 32,787m for the first nine months of 2011, compared to DKK 31,451m in the same period of 2010. DSV stated that it had "achieved satisfactory results for the first nine months of 2011, particularly when taking into account the declining global economic growth."

Revenue from the Road division increased 9.4% in the first nine months of 2011 reaching DKK 17,055m, compared to DKK 15,385m in the same period of 2010. Third quarter revenue improved 8.6% to DKK5,646m. The company stated that organic growth through new sales opportunities was the main contributing factor behind the revenue growth. Operating profit before special items (EBITA) increased 9.4% year-on-year from DKK594m in 2010 to DKK 650m for the first nine months of 2011. The Road division’s performance in Denmark and Germany in particular contributed to the improved results, while the company’s efforts in Belgium and Poland also displayed positive results.

DSV’s Air and Sea division reported revenue of DKK 4,742m in the third quarter of 2010, a decline of 10.8% compared to the third quarter of 2010. Similarly for the first nine months of the year the division posted a decline in revenue; however a decline of 1.6% to DKK 14,150m was far more marginal. In contrast, the division improved its operating profit (EBITA) for both the third quarter (9.2%) and first nine months of 2011 (13.8%) compared to 2010. The company attributed the improved results to greater freight volumes and higher earnings per shipment, as a result of its continued focus on cost management. Operations in the US, Germany and China made particularly positive contributions to the division’s revenue, whereas operations in France had a negative impact upon results.

A breakdown of the division into sea and air freight showed that year-to-date freight volumes increased in both sea (2.85%) and air freight (6.8%) operations. Despite the increased freight volumes, the division’s overall revenue remained similar to 2010 due to decreasing freight rates of shipping companies and airlines.

DSV’s Solutions division, which provides services such as freight management, outsourcing of warehousing and customs clearance as well as other related supply chain services, had year-to-date revenue of DKK 3,738m compared to DKK 3,639m in the same period of 2010. Operating profit increased 5.7% to DKK 205m. Third quarter revenue and operating profit figures remained flat compared to the previous year.

The performance of the Road division was impressive given the current economic climate and supported the Air and Sea division which is currently experiencing a volatile period in terms of volumes. Considering the slight decline in revenue recorded by the Air and Sea division, the company will have to remain focused on its cost management structure, although its margins are being supported by falling rates.

Quelle: eyefortransport
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