Denmark’s DFDS, northern Europe’s largest short sea shipping company, saw pre-tax profit fall 80 percent in 2012 from the previous year on flat freight volumes and overcapacity in its key markets.
The decline, to 152 million kroner ($26.7 million) from a record 742 million kroner ($130 .2 million) in 2011, also reflected increased competition and start up costs for a new route between the UK and France.
Revenue edged up by just 0.6 percent to $2.05 billion, and earnings before interest, tax, depreciation and amortization fell 27 percent to $191.6 million. Pre-tax profit before special items was down 58 percent at $48.4 million.
“We’re not satisfied with this year’s result, which was affected by recession in several of our key markets,” said DFDS’s CEO Niels Smedegaard. “A ray of light is the Baltic region and Russia, where there is still growth.”
The shipping unit’s operating profit declined 29.9 percent to $174 million because of lower volumes particularly on North Sea and English Channel routes, which outweighed 4.6 percent higher traffic between Scandinavia and Eastern Europe.
Logistics earnings slipped 18.1 percent to $24.6 million.
DFDS expanded its network with the acquisition of three routes from French carrier LD Lines, including one in the Mediterranean. It also bought a terminal in the Swedish port of Gothenburg.
The company expect the result for 2013 to equal to or to be slightly better than 2012, while revenue is forecast to grow by 5 percent due to the expansion of the network.