DSV saw its airfreight volumes and revenues improve in 2024 and is preparing for a volatile market in 2025 while it hopes to complete its takeover of Schenker in the second quarter of the year.
The Danish freight forwarder registered a 9% year-on-year increase in air cargo revenues to Dkk55.2bn last year, while gross profits were down 10.9% to Dkk11.9bn and air volumes improved by 7.1% to 1.4m tonnes.
The forwarder said its airfreight volumes had grown ahead of the market and revenues had benefitted from the higher levels of demand and higher rates. Meanwhile, profits were driven by lower average gross profit yields, while there were also higher costs due to inflation.
The company added that in the second half gross profit improved on a year on year basis.
Summing up the air cargo market in 2024, DSV said: ”The positive volume trend was most significant for airfreight, driven by significant growth in e-commerce volumes from China.
"Demand was positively impacted by a macroeconomic uptrend and an increase in consumer spending, especially in the US, in combination with some pre-loading ahead of a potential implementation of new US tariffs in 2025.
"The growth in global trade volumes remained at a higher level throughout the year compared to 2023 and was above the global GDP growth in 2024.
“The demand for airfreight was also positively impacted by an increase in conversions from sea to air shipments, driven by the narrowed price gap between airfreight and sea freight, disruptions related to the Red Sea situation and risk of strikes on the US East and Gulf coasts.
"Airfreight capacity gradually increased during 2024 with the continued return of belly-space capacity from passenger planes, partly offset by airspace restrictions related to the sanctions on Russia.”
During the year, DSV also expanded its air charter network with more frequent departures and new routes to support service levels.
In the fourth quarter, air revenues improved by 24.8% year on year to Dkk15.6bn, gross profit was up 2.2% and air volumes increased by 7.4% to 337,223 tonnes.
The overall Sea & Air division saw full-year revenues increase 14% to Dkk104.5bn and operating profit was down 9.9% to Dkk11.9bn. The overall company saw revenues for the year increase 10.8% to Dkk167.1bn, operating profit was down 9.2% to Dkk16.1bn and overall profit slipped 18% to Dkk10.2bn.
Market outlook
Looking ahead, the company is expecting another year of volatility with airfreight volumes expected to grow by around 3% year on year.
"We expect transport markets will continue to grow in 2025 in line with global GDP, but uncertainty remains high due to the macroeconomic and geopolitical situation, including potential trade barriers and tariffs.
"Market volatility as well as supply chain disruptions are also expected to continue into 2025, especially related to the situation in the Red Sea. Our response is to navigate the markets, while at the same time helping our customers to keep their supply chains flowing based on reliable, efficient and sustainable services."
The company also provided an update on its takeover of DB Schenker, an acquisition which will position the company as the world's largest airfreight forwarder.
The firm said it expected the acquisition, which is larger than all its previous deals combined, to close in the second quarter of 2025, pending regulatory approval.
DSV hopes to lift the operating margin of the combined entity to at least DSV’s existing levels within the respective business areas in three years after closing and the transaction is expected to be earnings per share accretive (diluted and adjusted) in year two after closing.
"The combination of DSV and Schenker is an excellent strategic match that will create a leading player in the industry with a combined pro forma revenue of more than Dkk300bn and a combined workforce of approximately 160,000 employees.
"The companies have similar business models and corporate culture with focus on customer service and corporate responsibility. The combination will complement all business segments and will improve the global network and service offerings to the benefit of all customers.
"The Air & Sea division will be significantly strengthened and will after the integration move more than 4m TEU of sea freight and around 2.5m tonnes of airfreight every year."
