Bruce Barnard, Special Correspondent | Aug 21, 2012 11:43AM EDT
Denmark’s DFDS cut its 2012 earnings guidance after Europe’s largest short-sea shipping and logistics group’s second quarter profit slumped amid a deepening eurozone crisis and stiffer competition on English Channel routes.
Profit after tax collapsed 92 percent to 23 million kroner ($3.8 million) in the three months to June 30 from 301 million kroner ($50.2 million) a year ago, as revenue slipped 3 percent to 2.97 billion kroner ($495 million).
The Copenhagen-based group blamed the 36 percent drop in its operating profit to $48.8 million on continued recession in several European countries, which reduced freight demand, and a difficult start-up of a U.K. service that is facing fresh competition in the second half.
As a result, the company cut its full-year operating profit guidance by $25 million to $192 million to $200 million.
“Compared with last year, the quarter’s result has declined considerably, as the upswing in 2011 peaked in the second quarter, after which the current economic downturn began,” Chief Executive Niels Smedegaard said.
Freight traffic on North Sea routes declined 8.6 percent in the second quarter because of the recession in the U.K. and the loss of an automotive logistics contract. Traffic was up 6.2 percent in the Baltic region and soared 43 percent on Channel routes between the U.K. and France following the collapse of SeaFrance.
Contact Bruce Barnard at brucebarnard47@hotmail.com.