This article first appeared on GuruFocus .
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Revenue:Q2 revenue grew 10% year-over-year, driven by fuel charges due to elevated oil product prices, with small underlying growth in both divisions when excluding fuel surcharges.
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EBITDA:Increased 35% year-over-year, up more than $300 million for the quarter.
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EBIT:Rose to $454 million for Q2, up $291 million, more than double the same quarter last year.
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Ferry Division EBIT:Reached $423 million for the quarter, up $237 million year-over-year, supported by lower net bunker costs and improvements in business units.
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Logistics Division EBIT:Increased $52 million to $85 million for the quarter, more than doubling year-over-year, driven by strong recovery in Nordic and continent operations.
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Interest Expense:Reduced by $24 million in the quarter; excluding a $9 million one-off litigation cost, the reduction was $33 million or 16%.
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One-off Impact:Q2 results negatively impacted by a $53 million one-off related to a litigation case from 2015.
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Cash Flow:Adjusted free cash flow for the first half of 2026 totaled just over $1 billion; Q2 investments were $316 million gross and $247 million net.
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Leverage:Net interest-bearing debt reduced by more than $2 billion over the past 12 months; leverage ratio improved to 3.4, within target range.
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Cost Program:On track to deliver the $300 million cost program, with over $250 million delivered to date.
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Outlook:Revenue outlook raised to 3%-5% growth; EBIT outlook raised to DKK1.2 billion to DKK1.4 billion for 2026; adjusted free cash flow raised to around $500 million.
Release Date: August 14, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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DFDS AS ( DFDDF ) delivered a strong Q2 with a 35% increase in EBITDA and EBIT more than doubling year-on-year to DKK 454 million.
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Both the Ferry and Logistics divisions showed significant underlying improvement, with Logistics EBIT up DKK 52 million and strong performance recovery in Nordic and Continent.
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The company's leverage ratio improved to 3.4, within its target range, and net interest-bearing debt was reduced by more than DKK 2 billion over the past 12 months.
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DFDS AS ( DFDDF ) raised its full-year 2026 EBIT outlook to DKK 1.2-1.4 billion and increased its adjusted free cash flow guidance to around DKK 500 million.
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The company has made progress on its strategic initiatives, including delivering over DKK 250 million of its DKK 300 million cost program and seeing continued improvement in its Mediterranean ferry business.
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DFDS AS ( DFDDF ) has hedged a portion of its bunker fuel exposure for the second half of 2026 to reduce earnings uncertainty from volatile oil prices.
Negative Points
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DFDS AS ( DFDDF ) reported a tragic fatality involving a truck driver in May 2026, highlighting ongoing safety challenges.
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Q2 results were negatively impacted by a one-off charge of DKK 53 million related to an adverse ruling in a litigation case that began in 2015.
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The company's emission intensity increased during the quarter due to fewer sailings, despite absolute emission levels remaining flat.
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The TESS business unit (Turkey and Europe South logistics) continues to face significant challenges, with management noting that a substantial operational improvement is still required.
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DFDS AS ( DFDDF ) flagged potential downside risks to demand due to high global oil prices, and July freight volumes were reported 3% lower, though management noted this is partly seasonal.
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The company has initiated a comprehensive strategy review, acknowledging a lack of clear direction and ambiguity in its current business portfolio.
Q & A Highlights
Q: Can you add any color on the split between the fuel tailwind versus organic growth baked into the H2 guidance? With July freight volumes released 3% lower, should we think of this as the run rate for H2? And what needs to happen for the dividend or buyback to be back on the table given the leverage ratio is now at 3.4x? A: Michael Hansen (CEO): The recovery across both divisions is continuing in the second half and is within our expectations. The higher oil price levels will have some impact on H2 results. The lower July volumes are not seen as representative for the full year, as July is a vacation month impacting Northern Europe and the North Sea. Regarding capital returns, we are pleased to be within our target range and remain investment grade, but the timing of any new dividends or buybacks is a conversation for the board at the right time, with no news to share on this call.
Q: Could you elaborate on the strategic reviewhow comprehensive and open-minded is it? Have you been in any dialogue with executives from Grimaldi? And can you comment on the board changes and the nomination of a new member? A: Michael Hansen (CEO): We are going into the strategic review with a very open mind, looking through the entire portfolio and turning every stone to create the foundation for the future DFDS. I have not met with executives from Grimaldi. Regarding the board changes, I have not previously worked with the new nominee, and questions about the nomination should be directed to the Lauritzen Foundation, who made the nomination.
Q: You stated you have hedged some of your bunker exposure for H2. How much of your exposure has been hedged for H2, and have you hedged anything for 2027? A: Michael Hansen (CEO): The spread exposure between HFO and MGO does not apply to our entire fleet. For the remainder of the year, we have hedged below half of our total bunker cost, but a little bit above half of our spread exposure. For 2027, we have started looking into hedging for Q1, but it is too early to quantify. This is a standard practice we do on a rolling four-quarter basis, with lower volumes hedged the further out we go.
Q: What is the latest update on the Mediterranean ferries segment? Are the financials trending in the right direction after the price increases in Q1? A: Michael Hansen (CEO): Yes, it is trending in the right direction. We see a migration from road to ferry, which is important as ferry is gaining traction relative to road. We continue to hold onto our volumes despite reduced capacity, which means underlying operational results are improving. We are satisfied with the progress so far, though we continue to calibrate between price and volume.
Q: On the TESS turnaround, you previously mentioned expecting breakeven by 2027. Is this business plan tracking according to plan given the soft export volumes from Turkey? A: Karen Boesen (CFO): For this year, we are guiding TESS to come out on par with the dissatisfying results of 2025. We continue to have a very intense focus on the operational turnaround through significant cost reductions and better utilization of assets and capacity. It is a longer journey as it is a complex and big business. Underlying there are improvements when disregarding the PPAs from last year, but a significant operational improvement is still required.
Q: On working capital, we saw another positive development in Q2 despite higher bunker prices. How should we think about this going into the second half? A: Michael Hansen (CEO): The positive working capital is partly due to seasonality, including the buildup of passenger prepayments for the high summer season and the ETS charges, which are cleared with the EU in Q3. This year, ETS is 100% of our emissions offset versus only 70% last year. We expect a significant reversal of the improved working capital in H2, combined with investments expected to be twice the level of H1, which explains the difference between the $1 billion adjusted free cash flow in H1 and the ~$500 million guidance for the full year.
Q: Can you provide the EBIT delta for the Jersey operations in Q2 versus last year? And what is the impact from the new Hibernian line route that started in June? A: Michael Hansen (CEO): Q2 last year was our first quarter in operation in Jersey, affected by significant one-off costs for vessel compliance and crewing optimization. The quarter-on-quarter improvement from Jersey is a double-digit million improvement, but not high double-digits. Karen Boesen (CFO): On Hibernian, they started a route between Ringaskiddy and Boulogne-Sur-Mer with two vessels. We see a smaller reduction in volumes on our Dunkirk-Ireland route, but it is not a material impact on our business.
Q: On the Mediterranean situation, you have reduced capacity. What is the split now in ferry capacity between you and Grimaldi on the Turkish routes? And are there any news about Grimaldi potentially adding another vessel? A: Karen Boesen (CFO): We have not reduced capacity by 50%; we have taken three ships out of rotation but largely maintained our volume, significantly driving up capacity utilization. The market is 54% ferry and 46% road. We have around 34% of the total market including road, which means we are north of 60% in terms of ferry capacity, making us by far the largest operator. Regarding Grimaldi, they have deployed four ships and there have been considerations about a potential fifth vessel, but we don't know their operational plans. It could happen, but it depends on terminal access. Our focus is on driving our own tonnage and optimizing utilization and pricing.
Q: Regarding TESS, can you share any considerations about the share of own production? And was the Q2 EBIT loss more or less in line with the ~100 million loss in Q1? A: Karen Boesen (CFO): TESS is a significant turnaround, and the company we acquired was in a worse state than anticipated. The utilization on our own ferries is around 12% to 13%. We do see underlying EBIT improvements in TESS, which are a little bit disguised by the PPAs included last year, not least because of the cost reductions we have implemented in the area.
Q: To what extent did the foot and mouth disease impact last year's earnings, and what kind of tailwind has that provided in Q2? For the complete transcript of the earnings call, please refer to the full earnings call transcript .
