About nine months after Danish freight forwarder DSV closed on the purchase of U.S.-based UTi Worldwide, the rewards are beginning to be noticed in the financial figures, as DSV report significant growth in both volume and net revenue for the third quarter.
According to DSV, overall freight volumes rose by 84.5 percent, compared to the same three-month period in 2015, reaching 147,744 tonnes. In the forwarder’s Air and Sea Division, net revenues rose by almost 54 percent to US$1.24 billion, while gross profits for air cargo alone increased by 55.3 percent to $313 million. DSV cited both the UTi merger and lower freight rates as having a major effect on the Q3 figures.
“The high net revenue is mainly attributable to UTi having contributed activities to the division worldwide, with U.S. as the largest single country, but also contributing major activities in Europe, Asia Pacific and Africa,” DSV said in its Q3 statement. “Relative to the same period of 2015, the net revenue of both DSV and UTi was negatively affected by low freight rates and exchange rates.”
As for the merger itself, DSV said the “main part” of integration of UTi would be completed by January 2017 and that “the financial synergies are expected to fully materialize within three years after the acquisition,” which would be early 2019.
For DSV’s total group business, the company reported a net revenues $2.55 billion for Q3, which was a 37 percent increase, y-o-y. Gross profit came in at just shy of $600 million, compared to the $418 million reported last year, while earnings before interest, taxes special items rose by 18 percent to $150 million.Like This Post