DFDS, the largest north European short sea shipping and logistics company, raised its 2010 profit forecast almost 15 percent following a surge in third quarter revenue and roll-on, roll-off cargo volume in the Baltic Sea.
The Danish company said it expects to book pre-tax profits -- excluding special items related to its acquisition of Norfolkline from A.P. Moller Maersk -- of $69 million rather than the earlier forecast of $59.6 million.
Third quarter revenue surged 84.6 percent from a year ago to $616 million, operating profit jumped 70.1 percent to $98.9 million and pre-tax profit doubled to $52.8 million.
By The Numbers: Asia-Europe Westbound Container Traffic.
DFDS attributed its sharply improved financial outlook -- it forecast a 2010 profit of just over $34 million in May -- to the $425 million acquisition of Norfolkline, which accounted for most of the increased revenue.
"We have gotten off to a really good start in the integration of DFDS and Norfolkline, both in operational terms and culturally, and the potential that we see in front of us meets our expectations," said DFDS Chief Executive Officer Niels Smedegaard.
"Performance wise, we are very satisfied with the third quarter, in which volume growth in the freight market, particularly in the Baltic Sea, remained at a higher level than expected," Smedegaard said.
Freight volume on the Baltic Sea routes grew 28.9 percent in the third quarter, but rates were "somewhat" weaker. North Sea traffic grew 6 percent, and rates rose due to a stronger Swedish krona.
Cargo volume on the English Channel shrunk as Eurotunnel, the operator of the tunnel between the UK and France, cut rates to boost market share.
Logistics margins remained under pressure as traffic imbalances on Nordic routes increased the costs of positioning empty trailers.
Rising trucking costs in continental Europe also squeezed margins for door-to-door transport.
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