The cost of ramping up its activities in the Mediterranean has caused DFDS' profit to shrink during the first quarter, despite a strong North Sea market.
Net profit after tax was DKK 120m for the period, down by almost 25% from the DKK 158m posted in the first quarter last year, the company's financial report shows.
"The continued expansion of our network drives DFDS’s growth in 2019 and beyond. Despite current headwinds in some markets, we are on track to deliver on our outlook for the year," commented Torben Carlsen, DFDS's chief executive.
Carlsen was appointed to the position in March with effect from 1 May, replacing Niels Smedegaard.
Operating profit saw a 13% year-on-year increase and was DKK 677m during the first quarter for the Danish ferry giant.
This figure, however, is almost 10% below the average analyst estimate of DKK 742.7m, according to calculations by Bloomberg, despite increased earnings.
Revenue for the three-month period was DKK 3.87bn, up 11% from the same quarter in 2018.
Headwinds
Although operating profit for the quarter was higher than that seen a year ago, DFDS also suffered much higher impact from financial items.
Finance costs mainly related to DFDS' Mediterranean expansion caused the company to take a DKK 75m hit to its bottom line.
The first in a series of six new freight ferries was delivered to DFDS in February and was successfully deployed between Istanbul and Trieste in March.
The late timing of Easter this year also caused DFDS to suffer negative one-off impacts on passenger revenues and additional vessel costs in Baltic.
Year ahead
DFDS said it plans to invest DKK 2.8bn in its business during 2019, most of which will be spent on new vessels and upgrades to the existing fleet, including fitting scrubbers.
The figure is DKK 300m more than estimated in its 2018 report, which was published in February.
The group said it sees continued positive low growth for Europe, even though consensus growth estimates have softened.
Trade with Turkey, it noted, could be challenging, particularly for Turkish imports due to recession in the country and political unrest.
DFDS paid a dividend of DKK 4.0 per share in March for its fiscal year 2018, compared to compared to DKK 10.0 in 2017.
