Third-party logistics giant DSV Panalpina (OTCMKTS: DSDVY) reported on Thursday a pretax operating profit of 2.7 billion Danish kroner (DKK) ($428 million) for the third quarter, up from DKK 1.78 billion ($280 million) for the same period last year and despite the supply chain disruptions caused by the coronavirus pandemic.
“Market conditions have been better than anticipated across most of our markets, and at the same time we benefit from efficient cost management,” said Jens Bjørn Andersen, DSV Panalpina Group CEO, in a statement.
DSV Panalpina said the negative impacts from COVID-19 began easing off during Q3, and it estimated with the exception of the bump in airfreight that the rest of its business activities are now “close to the level in the same period last year.”
“Since the beginning of the crisis, all our business units have been able to operate through lockdowns and other restrictions,” the Danish 3PL said. “So far, the financial impact from the crisis has been less severe than we originally anticipated.”
Overall, DSV Panalpina reported Q3 revenue of DKK 28.1 billion ($4.4 billion), compared to DKK 24.5 billion ($3.85 billion) for the same quarterly period last year. Gross profit for the company during Q3 was DKK 7.25 billion ($1.14 billion), compared to DKK 6.27 billion ($986 million) for the same period in 2019.
DSV Panalpina’s pretax operating profit year-to-date for 2020 is DKK 6.9 billion ($1.08 billion), compared to DKK 4.87 billion ($765 million) for the same year-to-date period last year. Based on its current financial performance and market conditions, the company anticipates a pretax operating profit of DKK 9.25 billion ($1.45 billion) by year’s end.
DSV Panalpina said it continues to benefit from its $5 billion acquisition of Panalpina in August 2019, particularly in its Air & Sea business.
“We are happy to announce that all material aspects of the Panalpina integration have now been successfully completed and we can now intensify the focus on organic growth,” Andersen said.
In other news, DSV Panalpina announced Wednesday that it acquired third-party logistics service provider Prime Cargo from Mitsui-Soko Group of Japan.
Financial terms of the deal were not disclosed, however, DSV Panalpina took control of Prime Cargo’s activities in Denmark, Poland and China.
DSV Panalpina said it has been observing Prime Cargo for the past several years, particularly its business specialty in e-commerce and fashion retail from China. “The company is a perfect match for DSV Panalpina’s Danish Solutions division and Air & Sea division,” DSV Panalpina said.
Prime Cargo Managing Director Morten Høilund will become part of DSV Panalpina.
The transaction is expected to be completed within two to three months subject to customary conditions, including clearance by applicable competition authorities, the company said.