Source: Lloyd's Loading List, 2020-04-23
Denmark-based ferry operator saw profits drop 43% in the first quarter as coronavirus lockdowns forced the lay up of almost a quarter of its vessels.
European ferry giant DFDS believes coronavirus lockdowns across Europe in the first half of 2020 will continue to threaten revenues and profits through much of the year.
The Denmark-based operator saw earnings before interest and taxes (Ebit) slump 43% in the first quarter on a revenue decline of just 1% to DKK3.8bn (€0.5bn), despite reporting that until mid-March coronavirus had only a “a limited impact on revenue and earnings”.
DFDS has now laid up 12 of its 50 vessels, cut the number of sailings on 20 routes and suspended two routes - Copenhagen-Oslo and Amsterdam-Newcastle – which are heavily reliant on passengers.
Although 84% of DFDS’ total revenue in 2019 was generated by freight activities and most of its services continue to operate, it warned that the ferry sector faced multiple risks over the rest of 2020.
For DFDS these include operations continuing to be exempt from lockdowns and “increased credit risk on suppliers, counterparts and customers”.
It also warned that it might face “lower activity in certain sectors during and post lock-downs” which may reduce freight volumes, adding that the automotive sector was “a key risk in this regard”.