Asset-light business model has ‘shown its strength’
European logistics giant DSV Panalpina – operating sizeable air, sea and road freight divisions – has issued its first quarter 2020 results, affected by the impact of the coronavirus on global trade.
Jens Bjørn Andersen, DSV Panalpina Group CEO, said: “When this year started, we were really looking forward to demonstrating the strength of the DSV Panalpina combination.
“The COVID-19 crisis has obviously changed the agenda for everybody and hit our markets in a severe way, but we have been able to continue the integration as planned. All things considered, we delivered satisfactory results in Q1 2020 and our asset-light business model has shown its strength.
“The crisis will have a significant impact on activity levels in the coming months, and we are taking the necessary steps to adapt while supporting the supply chains of our customers and ensuring the safety and health of our employees.”
The company said that DSV’s integration with Panalpina was “on track despite the COVID-19” and that the integration “continues as planned and we are on track to deliver the expected synergies”.
It added: “COVID-19 has only had limited impact on the integration plans. By the end of March 2020, more than 30 countries have been onboarded, representing approximately 70% of Panalpina volume. Transfer of customers to DSV systems is progressing well and no significant service issues have emerged.”
COVID-19
The statement continued : “16 March this year, we withdrew the financial outlook for 2020 and suspended our share buyback programme. As a result of the global outbreak of COVID-19, supply chains and the global transport and logistics markets are currently seeing a substantial negative impact, and we are unable to accurately assess the magnitude of this impact. We will provide guidance once we have more visibility.
“It is estimated that lower activity following COVID-19 impacted EBIT before special items negatively by approx. DKK 250 million in Q1 2020.
“In response to the situation we have taken initiatives to reduce the cost base by approx. DKK 1,400 million on an annual basis. The savings will trigger restructuring costs of approx. DKK 1,000 million in 2020.”
An update will follow later today.
