DFDS (DFDS) Q2 2018 earnings summary

Executive summary

• Q2 revenue rose 5.6% to DKK 3.894bn and EBITDA before special items increased 8.6% to DKK 802m, supported by freight growth and Mediterranean expansion.

• U.N. Ro-Ro was consolidated from 7 June, adding DKK 141m revenue and DKK 50m EBITDA in Q2.

• FY 2018 EBITDA guidance remained DKK 3.0–3.2bn; sharp TRY depreciation increased outlook uncertainty.

Financial highlights

• Revenue was DKK 3,894m versus DKK 3,688m; like-for-like growth was 4%. EBITDA before special items was DKK 802m versus DKK 738m, with margin at 20.6% versus 20.0%.

• EBIT before special items rose 6.1% to DKK 533m; reported EBIT was DKK 470m, down 7%.

• Profit before tax before special items was DKK 494m, flat YoY; reported profit before tax was DKK 431m, down 14%.

• Special items were a net cost of DKK 63m, including DKK 47m in acquisition costs; depreciation increased DKK 35m, mainly from acquisitions and IT/digital investment.

• Net income was DKK 407m versus DKK 485m, and EPS was DKK 7.29 versus DKK 8.70; free cash flow was DKK -3.0bn including the acquisition, or DKK 549m excluding it.

Outlook and guidance

• FY EBITDA guidance was unchanged at DKK 3.0–3.2bn: Shipping DKK 2,825–2,975m, Logistics DKK 275–325m and non-allocated items DKK -100m; revenue growth was forecast at ~10%.

• Investment guidance fell DKK 200m to DKK 5.0bn, primarily due to a lower U.N. Ro-Ro equity value price.

• Expected FY special items were revised to ~DKK -100m from DKK -45m, including acquisition, strategy and ferry-sale items.

• European real GDP growth above 2% was expected in 2018; demand for ferry and logistics services was expected to remain robust despite a UK slowdown.

• Guidance assumed U.N. Ro-Ro consolidation from 7 June; TRY volatility raised uncertainty, with lower Turkish imports expected for several months.