Nordea: DFDS to make solid profit on the Channel

Nordea projects that DFDS, due to factors including developments on the English Channel, will pay 10 percent of the current market value to shareholders every year going forward.

Nordea raises its earnings forecast for DFDS after the announcement that the carrier will acquire the two ferries from Eurotunnel on the English Channel after suffering repeated losses on the Dover-Calais service in recent years. Nordea also expects that DFDS will pay out 10 percent of the current market value to shareholders through annual dividends and share buybacks.

"The carrier can now look forward to turning the English Channel service around from a deficit business to a solid source of income. DFDS will contribute to a significantly increased profit in the years to come, and since investments can be kept at a reasonable level, this will result in strong cashflows - so strong that we expect that DFDS will pay out 10 percent of the current market value to investors annually through a combination of dividends (around 1/3) and share buybacks (around 2/3)," says Nordea in a morning briefing on Tuesday, noting that the DFDS share has not yet been adequately rewarded at the Copenhagen Stock Exchange in the light of recent developments on the English Channel.

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