Copenhagen, 2 December 2010
Company announcement no. 43/2010
• Stena Line acquires two of the four DFDS routes on the Irish Sea
DFDS has today sold two routes in the northern part of the Irish Sea to Stena
Line. The sale covers the routes Belfast-Birkenhead and Belfast-Heysham, plus
two ro-ro vessels (Hibernia Seaways and Scotia Seaways) and two chartered
ro-pax vessels. Stena Line will in addition take over operations at the port
terminals of Belfast, Birkenhead and Heysham. Turnover on the routes in 2009
was DKK 520m.
Stena Line acquires a company that owns and operates the routes, plus two
ships. The overall consideration, on a debt-free basis, is DKK 354m (EUR 47.5m)
and will result in an accounting profit in 2010 of approximately DKK 185m.
There are no conditions attached to the completion of the sale.
Responsible solution
"The Irish routes we took over at the purchase of Norfolkline have, in the last
two years, lost around a quarter of a billion Danish kroner. The prospect of
continuing very difficult market conditions and overcapacity on the Irish Sea
means it could be a long time before earnings improve significantly. That is
not in harmony with our financial objectives and we have therefore decided to
scale down our activity in this region," says Niels Smedegaard, CEO of DFDS.
Background to the sale
Improving profitability on the Irish Sea has been, and remains, an important
area of focus in DFDS' integration plan for Norfolkline. Besides the two routes
that are now divested, the activities include two routes from Dublin to
Birkenhead and Heysham respectively, plus agency and port activities.
The Irish Sea activities have in recent years made substantial losses due to
considerable overcapacity on the market. This is a result of a sharp decline in
demand since 2008 and lack of adjustment of capacity. Against this background
it has not been possible to develop a business plan that in the short term is
able to create a satisfactory return through optimisation and more efficient
operations on the northern routes. DFDS has therefore chosen a structural
solution and divested these routes.
DFDS will continue to analyse the remaining activities
Operation of the routes between Dublin and the UK will continue as before, with
two ro-pax ships on the route to Birkenhead and one ro-ro ship on the route to
Heysham. Port terminal operations in Dublin and sales agency activities will
likewise continue. Terminal services in Birkenhead and Heysham will be provided
through Stena Line. The strategic and operational analysis that was initiated
when Norfolkline was acquired will continue for the remaining activities. This
work is expected to be completed in the first quarter of 2011.
Profit expectation for 2010 upgraded by gain from sale
As a result of the above-mentioned gain of DKK 185m, DFDS' profit forecast for
2010 is upgraded accordingly from a pre-tax profit of DKK 250m to a pre-tax
profit of DKK 435m.
