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UPDATE 2-Danish freight operator DSV hit by lower volumes
February 20, 2013 / 8:41 AM / in 5 years

UPDATE 2-Danish freight operator DSV hit by lower volumes

* Sees 2013 EBITA 2.55-2.75 bln DKK, vs forecast 2.68-2.84 bln

* 2012 EBITA 2.4 bln DKK vs forecast 2.6 bln

* No share buyback for now, possibly next quarter

* Shares down 1.5 percent (Updates with details on share buybacks)

COPENHAGEN, Feb 20 (Reuters) - Danish logistics group DSV said this year’s profit would fall short of market expectations as a weak global economy hits freight volumes.

The company, which also decided against widely anticipated share repurchases this quarter, had expected a year ago that freight volumes to show stable growth in 2012.

“But expectations went unfulfilled, and towards the end of 2012 we had to realise that overall freight volumes had declined compared to 2011,” chief executive Jens Bjorn Andersen said, adding that he did not expect any improvement this year.

The company forecast full-year earnings before interest, tax and amortisation (EBITA) of 2.55-2.75 billion Danish crowns ($457-492 million), compared with a 2.68-2.84 billion range in a Reuters poll.

DSV’s operating profit last year was also slightly below expectations at 2.4 billion crowns, compared with a consensus forecast of 2.6 billion crowns.

The company was widely expected to buy back shares but it decided not to, opting to use the cash to pay for acquisitions and dividends instead. It said it may repurchase more shares next quarter if it makes no major acquisitions.

In 2012 it repurchased 10.4 million shares, or 5.5 percent of oustanding stocks, and diluted earnings per share rose 21 percent.

“I had definitely anticipated that they would announce a share buyback,” said Sydbank analyst Jacob Pedersen.

The company has been trying to keep growing in the face of lower freight volumes through takeovers. It acquired Czech peer Cechofracht in September and African group Swift Freight Group of Companies in October to strengthen its presence in the Middle East and Asia.

Andersen said the company was hoping to acquire more companies this year.

Finance chief Jens Lund said the company still wanted to buy back shares.

“Nothing has changed on the buyback policy,” he said on a conference call with analysts. “If we do no acquisitions when we announce the first quarter results I think you can count on us making a share buyback in the second quarter.”

DSV shares fell 1 percent to 141.50 crowns by 1220 GMT, compared with a 1 percent rise in Copenhagen’s benchmark stock index.

$1 = 5.5847 Danish crowns Reporting by Ritsuko Ando and Teis Jensen; Editing by Mark Potter and Louise Heavens

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