DFDS Adapts To Post Covid-19 Market Conditions
The new initiatives include:
Industry sales of large freight customer solutions, involving both ferry and logistics operations, will be combined in one unit. The unit will be part of the Logistics Division Overlapping functions will be streamlined.
Freight and logistics operations will be adapted to new market conditions, including optimisation of port terminal and haulage operations
Passenger concepts have been aligned to changes in travel market dynamics (mainly transportation and holiday travel).
Onboard concepts and offerings have been simplified.
A range of improvement and efficiency projects will simplify and focus business support functions. This includes a reshaped and integrated IT and digital organisation as well as a downsizing of various functions.
These initiatives are expected to generate annual cost savings of up to DKK 250m. In 2020, a positive financial impact of DKK 50-75m is expected.
The adaptation to the new market conditions will lead to around 650 employees leaving DFDS in the coming months, 200 of whom are employed in Denmark. DFDS currently employs around 8,600 people.
A one-off redundancy cost of around DKK 100m is expected in 2020 and will be recorded under Special items
DFDS: Current Situation
Freight volumes in Q2 have in most areas been above expectations and of the 12 freight carrying ferries laid up in March/April, five have now been redeployed.
One of the passenger routes, Oslo-Frederikshavn-Copenhagen, reopened on 25 June following the opening of borders between Denmark and Norway.
The reopening of the second passenger route, Amsterdam-Newcastle, and the non-essential travel on the English Channel is contingent on an easing of UK and EU travel restrictions.
DFDS: Outlook 2020
On 7 May 2020, the outlook for EBITDA before special items was reduced towards DKK 2bn.
Uncertainty remains exceptionally high, particularly for passenger travel, and this may still cause the outlook and its assumptions to change significantly in the second half of the year.
Therefore, the 2020 outlook for EBITDA before special items is maintained at this point in time.