DP World H1 profit soars 50%

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Revenue growth supported by the acquisitions of Jebel Ali Free Zone and Prince Rupert, Canada.
Revenue growth supported by the acquisitions of Jebel Ali Free Zone and Prince Rupert, Canada.

Dubai - Cash from operating activities amounted to $905 million up from $857 million in H1 2015

by

Issac John

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Published: Thu 18 Aug 2016, 11:00 AM

Last updated: Fri 19 Aug 2016, 9:47 PM

DP World announced on Thursday its first half net profit surged by 50 per cent to $608 million from $405 million for the same period in 2015, and said it retains the flexibility to bring on extra capacity in line with demand.
The company said its revenue grew 10.2 per cent to $2.094 billion, supported by the acquisitions of Jebel Ali Free Zone (UAE) and Prince Rupert (Canada). Cash from operating activities amounted to $905 million from $857 million in the first half of 2015.
The company invested $586 million across its portfolio during the first half of the year. “Capital expenditure guidance for 2016 remains unchanged at between $1.2 billion to $1.4 billion, with investments planned into Jebel Ali, Jebel Ali Free Zone, London Gateway, Prince Rupert, JNP Mumbai [India], and Yarimca [Turkey],” a company statement said.
The company said as per its policy of boosting capacity in line with demand, it had delayed at Jebel Ali port 1.5 million TEU of Terminal 3 capacity expansion into 2017. It also slowed expansion of Terminal 4 due to softer market conditions.
“Our flagship port continues to operate at high levels of utilisation and we believe the medium-term outlook remains positive, particularly with the lead up to Expo 2020.”
DP World said it had raised $1.2 billion in a new seven-year sukuk transaction at significantly improved terms, refinancing $1.1 billion of the existing 2017 sukuk through a tender offer and extending the debt maturity profile.
Despite a challenging trade environment, DP World’s portfolio remains well-placed to continue to outperform the market.
DP World Group chairman and CEO Sultan Ahmed bin Sulayem said the modest first-half earnings growth is a reflection of the challenging trade environment. “This financial performance has been achieved despite uncertain market conditions, which once again demonstrates the resilient nature of our portfolio. In 2016, we have invested $586 million of capex in key growth markets, and this investment leaves us well placed to capitalise on the significant medium- to long-term growth potential of this industry.”
He said the company would maintain the existing shape of its ports portfolio that has a 70 per cent exposure to origin and destination cargo and 75 per cent exposure to faster growing markets.
“The outlook for trade growth remains uncertain, however, we believe our portfolio is well-positioned to continue to outperform the market. We remain focused on delivering relevant new capacity in the right markets through disciplined investment, improving efficiencies and managing costs to drive profitability,” said bin Sulayem.
“Looking ahead to the second half of the year, we expect throughput performance to improve. Overall, the strong financial performance of the first six months leaves us well-placed to meet full-year market expectations,” he said.
Market conditions in the Middle East, Europe and Africa region were mixed. “Growth within our portfolio outside of the UAE was strong, with Europe continuing to outperform, mainly driven by the ramp up at London Gateway. Volumes in the UAE were down by six per cent at 7.4 million TEU, reflecting a reduction in lower margin cargo. Revenue in the region grew 12.1 per cent to $1.542 billion, aided by the acquisition of Jebel Ali Free Zone. Like-for-like containerised revenue per TEU was up by 6.5 per cent and total revenue per TEU was up by 5.7 per cent.”
— issacjohn@khaleejtimes.com
 
 


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