Denmark’s DSV A/S, one of the world’s largest freight and logistics companies, said that expected profit from a $10 billion joint venture with Saudi Arabia’s state-backed Neom will be slower in coming than previously forecast due to delays in the so-called giga-project.
Neom is a $500 billion futuristic desert city project on Saudi Arabia’s northern Red Sea coast and is a centerpiece in Crown Prince Mohammed bin Salman’s Vision 2030 economic and social development strategy to diversify the oil-reliant Saudi economy.
The Neom partnership gives DSV exclusive rights to manage logistics and transport services at the giga-project, with DSV holding 49 percent and Neom the remaining 51 percent.
The venture, announced in October 2023, was due to start operations in the second quarter of 2024 but was delayed due to missing regulatory approvals from Saudi Arabia and Egypt.
“The ramp-up in Neom has been slower than we expected,” DSV CEO Jens H. Lund told shareholders at the company’s annual general meeting on Thursday evening. That has impacted profit generation, he said.
DSV had committed to invest as much as $2.45 billion in the project but has capped spending in 2025 at $100 million as project timelines slip.
The Danish-listed company, which is valued at about $50 billion, expects the Neom venture to begin this year.
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