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Danish shipping firm DFDS A/S has posted a 28 percent drop in profit in its half year financial report for 2008.

In a company announcement, DFDS said operating profit before depreciation (EBITDA) for the first six months of the year had decreased to DKK 434 million (US$85.2 million), a fall of 28 percent.

Pre-tax profit for the same period was reduced by 62 percent to DKK 68 million (US$13.4 million).

The Copenhagen-based firm said difficult market conditions and high oil prices had impacted performance during the first half of 2008.

Despite a 4 percent increase in revenue to DKK 4.2 billion (US$0.8 billion), bunker prices and haulage costs also rose during the same period due to the increase in crude prices.

The company said its improvement plan for Passenger Shipping had also resulted in restructuring costs amounting to DKK 28 million (US$5.5 milion) in the second quarter.

In the freight market, DFDS said volumes had declined on east to west traffic in the Baltic Sea, but had remained stable in the North Sea.

Earlier this month, the company announced a change to its profit forecast for 2008 due to a rise in bunker costs, increasingly difficult market conditions and restructuring costs. Operating profit before depreciations (EBITDA) is now expected to be 15-20 percent lower than in 2007. An increase of 0-2 percent had been previously predicted.

DFDS said approximately one third of the profit adjustment was due to a rise in bunker costs, which the company predicted would increase by a total of approximately DKK 400 million (US$79.7 million) compared to 2007.

Commenting on current market conditions, the DFDS said "The impact is greatest for traffic from east to west in the Baltic region and the Irish market. Haulage costs have also increased due to higher fuel prices, which can only be passed on to a limited extent due to market conditions. About half of the profit adjustment can be attributed to the change in market conditions."