European Short Sea Line DFDS Profit Grows

European Short Sea Line DFDS Profit Grows

DFDS, the leading north European short sea shipping line, reported sharply higher earnings and revenue in a "considerably better than expected" first quarter buoyed by rising roll-on, roll-off cargo volume.

The Copenhagen-listed group, which is also active in container shipping and port terminals, boosted operating profit by 27.8 percent to $17 million on a 12.6 percent revenue growth to $271 million.

The company said freight market trends "remain more positive than anticipated earlier this year" and doubled its 2010 profit forecast to $34 million.

The forecast excludes items related to Norfolkline, the North Sea ferry line acquired from Denmark's A.P. Moller-Maersk for $472 million in December.

"There is more volume in the freight market than we had anticipated, and we have succeeded in chartering out all our excess tonnage," said Chief Executive Officer Niels Smedegaard.

Earnings on roll-on, roll-off freight routes were boosted by large volume increases in the Baltic region and a rise in the value of the Swedish currency against the Danish kronor.

Results in parts of the container shipping and truck trailer operations were "unsatisfactory" in the first quarter but were more than offset by growth in other business areas.

Growth in the short sea container markets continues to lag ro-ro volume, especially in the Baltic.

The Norfolkline acquisition is currently being investigated by European Union competition regulators and is expected to be finalized in June.

The merger between Norfolkline and DFDS will create the biggest freight and passenger route network in northern Europe, stretching from Russia to Ireland, served by a fleet of more than 70 ships and over 6,000 employees.

As part of the deal, A.P. Moller-Maersk acquired a 31 percent stake in DFDS.

-- Contact Bruce Barnard at brucebarnard47@hotmail.com.