DSV 3Q profit rises 19.5% as Schenker integration lifts earnings

DSV, a Danish logistics giant, reported a 19.5% rise in third-quarter operating profit to 6.606 billion Danish kroner ($990.9 million) for the quarter ending September 30, 2023. This improvement came from synergies gained from its Schenker acquisition and solid performance in air, sea, and contract logistics, which outweighed challenges in trucking.

Pre-tax earnings before special items totaled 6.606 billion Danish kroner ($990.9 million), including 45 million in gains from property disposals. Revenue grew 12.1% year-over-year to 12.11 billion Danish kroner ($1.71 billion), while gross profit increased 3.8% to 3.04 billion Danish kroner ($430.7 million). Air and sea EBIT before special items rose 18.9% to 641.7 million Danish kroner ($90.8 million), with integration-related cost savings driving a conversion ratio of 45.8% from 38.6%.

Contract logistics EBIT climbed 50.3% to 251 million Danish kroner ($35.6 million), buoyed by synergies, enhanced productivity, and efficient capacity utilization. However, trucking remained a weak point, with EBIT before special items falling 35.1% to 78.9 million Danish kroner ($11.1 million), hurt by lower volumes and productivity following Schenker integration disruptions in Europe.

The company expects to divest USA Truck in 2025 as part of reshaping the acquired business. DSV now forecasts 2026 EBIT before special items to be between 3.6 billion and 3.75 billion Danish kroner ($510 million to $562 million), with integration-related special items expected to be around 825 million Danish kroner ($117 million).

The company aims for about 1.35 billion Danish kroner ($191 million) in total transaction and integration costs, with cash flow narrowing to 965.9 million Danish kroner ($137 million) and debt-to-equity rising to 2.5 times. DSV's outlook remains sensitive to macroeconomic uncertainties, including energy prices, global inflation, Middle East tensions, and trade tariffs.