DFDS set to expand in 2010
SHIPPING: DFDS after tax profit in 2009 was 89 million kroner, revenues at 6.6 billion kroner and an operating profit of 786 million dollar. The management sees it is a reasonable result in a difficult year.
"2009 was as foreseen a very challenging year and this is reflected in the numbers of the annual report. On the other hand, the result is among best in class of our sector, and that is an important benchmark for us. The freight activities were impacted by a considerable downturn in volumes and rising price competition, while the passenger activities improved earnings on the back of more passengers, restructurings and a lower bunker cost", says CEO Niels Smedegaard in a comment to the report.
"With the acquisition of Norfolkline late last year, we took a decisive step towards our vision of creating a strong North European sea-based transport network, and DFDS will in the future be better positioned to effectively serve our customers", Smedegaard says.
"DFDS have two major tasks in 2010. Our markets are only just beginning to show signs of improving, and we must continue to navigate through difficult waters. At the same time, we will focus on implementing an effective integration of Norfolkline as fast as possible."
The management believes, that the freight rates willremain under pressure, while volumes have shown positive growth in the first two months of the year across most of DFDS' markets. It is therefore assumed, that the recession of 2009 will be replaced by some growth and progress in 2010.
The performance of the freight activities, which was hardest hit by the recession, is generally expected to improve in 2010, while some deterioration is expected for the passenger activities, driven by higher bunker cost. All in all, a pre-tax profit of around DKK 100 million is currently expected for 2010. The expectation does not include transaction costs related to the acquisition of Norfolkline, management says.
The expected acquisition of Norfolkline, announced 17 December 2009, remains subject to approval from relevant competition authorities, the implementation of a rights issue and a directed rights issue. These processes are progressing according to plan. Completion of the transaction is currently expected to take place towards the end of Q2 2010.
The planning of the integration of DFDS and Norfolkline was kicked off in February with participation of employees from both companies. The scope of the planning is all aspects of the integration in order to allow the actual integration to start immediately after completion of the transaction.
Norfolkline's expected earnings and the financial consequences of the integration - earnings as well as costs - have not been included in DFDS' expectations for 2010, but will be included after completion of the transaction.
Source: DFDS
