Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DFDS AS (DFDDF, Financial) reported an 8% revenue growth in Q1 2025, driven by the acquisition of the former econ business.
- The company is making progress on its three focus areas: adapting Mediterranean capacity, implementing price increases, and logistics boost projects.
- DFDS AS (DFDDF) has a strong cash flow focus, with a net improvement of working capital by about DKK400 million.
- The company is committed to reducing its financial leverage ratio by the end of the year.
- DFDS AS (DFDDF) is aligning its plans with new greenhouse gas targets and has reduced ferry emissions intensity by 6% in the quarter.
Negative Points
- The Mediterranean segment reported a significant negative impact, with a swing of DKK200 million due to competitive pressures.
- The logistics division's performance was below expectations, primarily driven by challenges in the BU continent.
- The company faces geopolitical risks, including potential European recession and increased political risk in Turkey.
- DFDS AS (DFDDF) is dealing with increased competition and freight capacity in key routes, such as Istanbul-Trieste and Holland-UK.
- The company's leverage ratio has increased compared to the previous quarter, driven by lower earnings and increased net interest-bearing debt.
Q & A Highlights
Q: Following the price increases in March, when would you next expect to change prices potentially on the Mediterranean? Also, regarding the full year '25 guidance, what contribution are you factoring in from the turnaround measures, and what could cause you to upgrade or downgrade the guidance?
A: The price measures for 2025 have already been communicated to our customers, so we are confident about their adaptation. The main focus is on managing capacity with demand, and we have planned reductions later in the year. Regarding guidance, the certainty of our projections is high, and further price recovery is expected in 2026. As for working capital, factoring programs are being used to maintain governance headroom, and there is no concern regarding leverage.
Q: The Mediterranean ferry segment reported a negative EBIT of around DKK200 million in Q1. How does that compare to Q4, and could you share the trend from January to March and in April?
A: The swing from last year was DKK200 million, indicating the full impact of competitive entry. The situation is improving as capacity adaptation and price increases take effect. By Q4, we expect to perform above last year's Q4.
Q: What is the current status of the competitive environment in the Mediterranean segment, and are there plans for further price increases?
A: The competitive environment is not entirely stable, but it has improved since Q4. Planned price increases have already been communicated to customers and will take effect during the year. We are focused on maintaining a good demand-supply situation.
Q: Regarding the ferry guidance increase of DKK100 million, what factors contributed to this improvement?
A: The improvement is due to better performance in several areas, including the Strait of Gibraltar, and smaller improvements across the network.
Q: With P&O increasing capacity and competition in the North Sea, how are you adjusting your capacity or pricing?
A: P&O's capacity increase is noted, but it is not directly in our corridors. Our North Sea operation remains stable, and while there are many operators, price increases are challenging. We are monitoring the situation for any spillover effects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
