There is a possibility of an upward adjustment from Danish DSV when the transportation major delivers its second quarter results next week.

And if it doesn’t happen then, it could happen later in the year despite headwinds from falling demand and freight prices, says Sydbank’s senior analyst, Mikkel Emil Jensen.

”With strong yield control, an adaptable business model and prospects of stabilizing volumes during the second half of 2023, we see a high probability of an upward adjustment in connection with the half-year results or later in the year,” the analyst writes.

Demand for goods has been declining in 2023, with high inflation and interest rate hikes causing consumers to hold on to their money and creating ample inventories that do not need to be replenished to the same extent.

This affects freight companies in the second quarter, where Sydbank expects a decline in air freight volumes of 19 percent, while the decline in sea freight is expected to be more subdued at 7 percent.

It is lower freight rates on container freight that are expected to have shifted more freight to container ships, affecting air freight. Still, DSV’s ability to make money should limit the damage, the analyst predicts.

”We expect DSV to continue to see the number of shipments decline less than the volume, which should have a supportive effect on gross profit per unit shipped (yield),” writes Jensen.

Looking ahead, however, there are prospects for recovery, which leads Sydbank to predict a possible upward adjustment.

Sydbank forecasts an operating profit (EBIT) of DKK 18.4bn (USD 2.8bn) for the full year 2023 at DSV.

DSV itself aims for an EBIT result in the range of DKK 16-18bn.