Weakened European demand hurts DFDS Q3 results
With European demand weak, Danish shipping and logistics company DFDS Group saw its pre-tax profits fall 18 percent to DKK 273 million ($46.6 million) in the third quarter of 2012 compared with DKK 332 million ($56.7 million) in the same period in 2011, Ship & Bunker reports.
The company's revenues were up 2 percent year-over-year to DKK 3.17 billion ($541 million), and most business areas were improved despite a 7.7 drop in freight volumes on the North Sea.
"The wheels of Europe's economies, and thereby the transport sector, turned somewhat more slowly in Q3," said CEO Niels Smedegaard.
"This was foreseen and included in our profit expectation for the full-year 2012, which therefore remains unchanged.
"We will, however, most likely pass the finishing line at the low end of the expected interval, as halfway through Q4 we see continued weakening of demand in Northern Europe."
Smedegaard said the weakening demand has led to overcapacity in several markets, which has pushed DFDS's return on invested capital lower than expected.
The company was hit with a one-off charge of DKK 25 million when it cancelled the construction of two ro-ro freight ships with German shipyard P+S Werften GmbH, Stralsund, a decision DFDS announced in September, saying the shipyard had breached several contract terms.
