DFDS overcomes Brexit fears to post strong financial results for 2016

DFDS overcomes Brexit fears to post strong financial results for 2016

Ferry and logistics business DFDS reports no negative impact on volumes from the Brexit effect as it continues to post record earnings.

The company’s annual report for 2016 showed that freight volumes and UK-Continental trade flows are holding up well despite the result of the UK referendum last June.

Full-year revenues for the group were up by eight per cent at £1.56 billion, compared with 2015 (adjusted for currency changes and excluding bunker surcharges).

Its Shipping Division accounted for £1.08 billion of this, up from £1.03 billion, driven by a 21 per cent increase in freight volumes.

The company also carried 12 per cent more passengers during the year.

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Higher earnings for the Shipping Division helped pre-tax profits jump by 52 per cent to £182 million, compared with last year.

Improved earnings on DFDS’ cross-Channel routes from Dover to Calais and Dunkirk accounted for almost half of the increase following the deployment of additional ferry capacity since February 2016 and continued growth in the freight market.

Rising freight volumes in the final quarter of 2016 indicate no impact on cross-border trade between the UK and Europe following the Brexit vote.

Across the European route network 17 per cent more freight was carried during this period than at the same time in 2015.

Passenger numbers on its routes also increased by six per cent over the same period.

While depreciation of the British pound in the last six months of the year impacted on the full-year result, this was offset by the continued increase in volumes and rates in the freight market.

Volume growth was supported by increases in capacity, thanks to the introduction of two new ferries - the Cote de Dunes and the Cote de Flandres - on the Dover to Calais service, and on the key freight corridor between the UK and the Netherlands on the North Sea.

Kasper Moos, vice president for DFDS in the UK, said: “Our earnings increased considerably during 2016, with the vote for Britain to leave the EU having little real impact on volumes.

“We will continue to monitor developments, however.

“Thanks to our work to continuously improve our service and to offer customers the capacity they require across our network, we have continued to grow our markets and we’ve posted another year of record financial results.

“Our pursuit of continuous improvement will continue in 2017, with further investment in our fleet, a focus on bringing digital innovation that benefits our customers, and a drive to further improve customer satisfaction with the services that we provide.”

Looking ahead to 2017, DFDS expects revenues to increase by a further four per cent (excluding bunker surcharges) across its ferry and logistics business.

With the Bank of England adjusting its growth expectations for the UK economy upwards to two per cent, freight volumes, seen as a marker of economic growth, are expected to continue to increase.

Moos added: “As a ferry and logistics operator with more than 2,200 employees in the UK, we are at the heart of the on-going Brexit process and based on trends for the last few months of 2016, we expect to see continued growth in trade.”

The company will invest almost £20m in 2017 to expand capacity and renew its fleet.

Two new, large chartered freight ships for its route from Immingham to Rotterdam in the Netherlands, are due for delivery in May and September.

The investment programme also includes improvements to passenger and freight facilities on two cruise ferries on the Newcastle-Amsterdam service and on one of its Dover-Calais ships.