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Investing.com -- DSV shares rose more than 5% on Thursday after the Danish transport and logistics group posted third-quarter results that beat profit forecasts, supported by strict cost control and faster synergy realization from its DB Schenker acquisition, which offset weaker revenue.
The company reported quarterly revenue of DKK71.98 billion, up 63% from a year earlier but 4% below consensus estimates.
Gross profit increased 76% to DKK19.51 billion, 6% short of forecasts, while EBIT rose 23% to DKK5.43 billion, 2% ahead of expectations. The EBIT margin reached 7.5%, compared with 7.1% expected, according to analysts.
The company narrowed its full-year 2025 EBIT guidance to DKK19.5 billion to DKK20.5 billion from DKK19.5-21.5 billion previously, with the midpoint 5% above consensus of DKK19.6 billion.
DSV also raised its synergy expectations for 2025 to about DKK800 million from DKK500-600 million and maintained total synergy targets of DKK9 billion by 2028. The company expects 30% of integration completed by year-end 2025 and 70% by 2026.
“Synergies for ’25 have been upgraded implying a slightly higher cut to org growth,” Jefferies said in a note, noting that “the accelerated realisation of synergies has brought required org growth in ’26 to meet Cons down to -2% vs +5% at 2Q.”
Morgan Stanley said, “EBIT +2% despite GP miss. Cost control, synergy realisation in evidence. Consensus already at bottom end of narrowed range.”
Kepler Cheuvreux added that the results were “not as bad as feared,” citing improved conversion rates across all divisions.
In the Air & Sea division, revenue rose 36% to DKK38.69 billion, with EBIT of DKK3.53 billion, 3% below expectations.
The unit’s EBIT margin stood at 9.1% versus 9.4% expected. Road revenue climbed 135% to DKK23.42 billion, and EBIT increased 55% to DKK798 million, 14% above forecasts.
The Road EBIT margin was 3.4%, ahead of the 2.8% expected. Solutions posted revenue of DKK13.11 billion, up 98%, with EBIT of DKK1.10 billion, 10% above expectations, and a margin of 8.4% versus 8.1% forecast.
Operationally, DSV transported 578,569 tons of airfreight, 64% higher year over year and 2% below consensus.
Sea freight volumes reached 1,072,808 TEUs, 52% higher than last year and 1% below estimates.
Excluding Schenker, air and sea volumes were down slightly year over year, while yields declined by a low-to-mid single-digit percentage, less than at peer Kuehne + Nagel, according to Kepler Cheuvreux.
Operating cash flow improved to DKK6.43 billion from DKK4.59 billion in Q3 2024, while adjusted free cash flow rose to DKK4.28 billion from DKK2.52 billion.
Margins across divisions remained largely in line or slightly above expectations, reflecting what Morgan Stanley called evidence of cost control and synergy delivery despite market softness.”
Jefferies maintained a “buy” rating with a DKK1,700 price target, Kepler Cheuvreux kept “Buy” with DKK1,900, and Morgan Stanley rated DSV “overweight” with DKK1,700.