DFDS A/S | Company announcement no. 9/2020 |
- Ongoing adaptation of operations to market conditions
- Solid financial position secured
- Strong focus on employee health and well-being
- Preliminary Q1 2020 EBITDA decreased 10% to
DKK 610m
Conference call for analysts and investors today 21 April
Our current key priorities are to take care of our employees’ and partners’ health and well-being, to preserve jobs and to continue to provide vital ferry and logistics services for our customers as well as contributing to keeping Europe’s transport infrastructure open for business.
Operational measures to adapt to Covid-19
84% of DFDS’ total revenue in 2019 of
All of DFDS’ freight activities continue to operate through the lock-downs as
To adapt activities to the lock-downs, a number of measures have been and are being taken:
- Throughout our operational sites — including freight ferry routes, port terminals, and logistics solutions such as forwarding and warehousing operations — we continue to operate by strictly following authorities’ enhanced health procedures and guidelines to ensure safe and reliable operations
- In offices, authorities’ guidelines are likewise applied to ensure employee health and well-being such as travel restrictions, working from home, split teams and enhanced hygiene
- Suspension since mid-March of two routes,
Copenhagen -Oslo andAmsterdam -Newcastle, with a large overweight of passengers vs freight - Freight capacity reduced since end-March/beginning-April in remaining network of 20 ferry routes that predominantly carry freight. Capacity is reduced through lay-up of currently 12 of 50 ferries as well as other measures to reduce the number of sailings. All 20 routes continue to operate
- Channel and
Baltic Sea passenger activity reduced to only essential travel. Reduced number of drivers per cabin inBaltic Sea - Participation in government wage and fixed cost compensation programs to preserve affiliation with employees and mitigate financial impacts
- Around 2,200 employees so far sent on paid leave within such programs in areas with reduced activity
- Contingency planning for reduction of logistics capacity ongoing, including equipment and warehousing. Primary change so far is suspension of a large part of the cross-docking operation in
Gothenburg - Cost saving and postponement initiatives, including hiring freeze
- Reduction of investments targeting a reduction of around 20% of the investments of
DKK 2.3bn planned for 2020. As Q1 2020 investments are completed this equals a targeted reduction of around 30% in Q2-4.
Win23 strategy initiatives and other strategic projects are continuing albeit with some delay.
Solid financial position
DFDS is in a solid position with regard to both liquidity resources and financial flexibility to meet challenges and opportunities that may arise from present and future market conditions.
Liquidity resources at the end of Q1 2020 amounted to
The covenants of a loan agreement — entered into in
Preliminary key figures for Q1 2020
In view of the continued exceptionally high level of uncertainty, a selection of preliminary key figures from the Q1 2020 income statement is provided in the table below ahead of the scheduled reporting of Q1 2020 on 7 May.
| PRELIMINARY | ||||||
| DKK m | 2020 | 2019 | 2020 | 2019 | ||
| Before special items | Q1 | Q1 | Change, % | LTM | FY | Change, % |
| Revenue | 3,813 | 3,870 | -1.5% | 16,535 | 16,592 | -0.3% |
| EBITDA | 610 | 677 | -9.9% | 3,566 | 3,633 | -1.8% |
| EBIT | 133 | 234 | -43.1% | 1,650 | 1,751 | -5.8% |
| Finance, net | -35 | -75 | 53.1% | -239 | -278 | 14.3% |
| Profit before tax | 98 | 159 | -38.3% | 1,411 | 1,472 | -4.1% |
Preliminary Q1 revenue decreased 1% to
Covid-19 had until mid-March a limited impact on revenue and earnings. From mid-March, passenger revenue and earnings were reduced as two passenger routes were suspended and passenger travel on other routes was reduced to only essential travel. To a lesser extent freight activities were also negatively impacted from mid-March by lower activity related to Covid-19.
The Q1 revenue decrease was thus mainly due to a drop in passenger revenue in March. Freight revenue remained overall on level with 2019, including positive impacts from acquisitions and bunker surcharges related to the transition to new rules limiting the sulphur content in fuel oil from the start of the year.
Around half of the decrease in EBITDA was related to lower passenger activity caused by Covid-19. The other half of the decrease was due to a negative Covid-19 impact on freight, increased earnings in the comparison period Q1 2019 from
Key risks
The current situation gives rise to a number of risks that could impact operations and earnings in 2020. At this point in time, key risks for DFDS are:
- Reliability and continuity of operations are contingent on employee health and continued exemption of our operations from lock-down initiatives
- Passenger earnings in the high season — June-August — are at risk from duration of lock-downs and level of ferry travel post lock-downs
- Lower activity in certain sectors during and post lock-downs may reduce freight volumes. The automotive sector is a key risk in this regard
- Increased credit risk on suppliers, counterparts and customers.
Q1 2020 reporting
DFDS reports Q1 2020 on
Conference call details for today
Analyst and investor conference call today 21 April
If you wish to take part in the audio conference, please dial up at least five minutes before the conference begins. It will start on time, and participants will be asked to register name and company name beforehand.
The conference will be broadcast live on https://www.dfds.com/en/about/investors/2020-investor-call and published there for future reference.
Call details: +45 32 71 49 98. Room number: 481868. Participant pin code: 6629.
For participants outside
Contact
+45 33 42 32 01
+45 33 42 33 42
Søren Brøndholt Nielsen, IR
+45 33 42 33 59
+45 33 42 32 97
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act
Attachment
- UK_OMX_NO_9_21_04_2020
© OMX, source
