DSV plans another large acquisition following integration of Panalpina
DSV Panalpina saw its revenues and profits jump last year and is taking aim at another large acquisition following the integration of Panalpina.
Last year, the Copenhagen-headquartered logistics firm saw its revenues increase by 22.4% year on year to Dkk115.9bn, earnings before interest and tax (ebit) before special items was up 43.1% to Dkk9.5bn and net profit improved by 14.9% to Dkk4.3bn.
Performance was boosted by the inclusion of Panalpina from the second half of 2019, which would have boosted year-on-year comparisons in the first half of 2020.
Meanwhile, the overall forwarding market was affected by lower volumes but higher rates as capacity shortages in both air and shipping pushed up prices.
The forwarder’s airfreight division saw revenues in 2020 increase by 64.9% year on year to Dkk44.8bn, gross profits per ton reached Dkk8,075 against Dkk6,155 in 2019 and volumes increased by 18.8% to 1.3m tons.
Performance here was also driven by higher rates and the inclusion of Panalpina.
“The global airfreight market was significantly impacted by the Covid-19 crisis during a volatile 2020 and we estimate that market volumes were 13-15% below 2019,” the company said.
“As a large part of passenger planes were grounded, the bellyhold capacity was missing, and total available capacity was more than 20% below pre-Covid-19 levels.
“The demand for airfreight exceeded available capacity on most trade lanes, leading to historical high rate levels.
“Geographically the demand was strongest for exports from Asia during the year, whereas European exports were weaker.”
It added: “We expect that the airfreight market will remain challenging in the foreseeable future.
“It may take two years before inter-continental passenger traffic is back at 2019 levels, and the market will continue to rely on freighter aircraft capacity.”
Meanwhile, the forwarder’s chief executive Jens Bjørn Andersen said that it is hoping to make further large acquisitions this year following the faster than expected integration of Panalpina.
Andersen said the company’s performance in 2020 demonstrated the benefits of bringing Panalpina and DSV together. It also has an A rating from ratings agency Moody’s meaning it is in a good position to fund any deals.
He further explained that the air and sea division is in a better position to quickly integrate a new company than road or contract logistics, where IT systems need to further developed.
Andersen added that 60% of gross profits are currently generated in the Europe, Middle East and Africa region and therefore it would look to expand in other areas of the world as it sought to become more global.
Asia was name-checked as one area for further expansion, although Andersen said that did not automatically mean it would buy a China-based logistics company.