DP World profit leaps 10%; capex hits $1.4B

Dubai - Port operator plans to spend between Dh500M and Dh1B to expand Jebel Ali Free Zone this year

Global ports operator DP World reported on Thursday a 10.2 per cent jump in net profit for 2018 and unveiled plans to invest $1.4 billion this year in its global ports portfolio, up from the $908 million spent in 2018.
The company said the surge in profit was on revenue growth driven by acquisitions and growing global trade despite trade tensions and geopolitical headwinds.
The Dubai-based company said the new investment is planned mainly in the UAE, Posorja (Ecuador), Berbera (Somaliland), Dakar (Senegal) and Sokhna (Egypt).
The world's fourth-largest port operator said in a statement that its profit for 2018 attributable to owners surged to $1.3 billion from $1.18 billion recorded in 2017. The growth was achieved despite challenges including trade disputes around the world and geopolitical crises.
Annual revenue rose 19.8 per cent to $5.6 billion, up from $4.7 billion the year prior, driven mostly by acquisitions such as Drydocks World and consolidation of its portfolio.
The company said it had expanded aggressively into new markets, including into East Africa.
DP World said it expects to continue delivering growth in 2019 despite an uncertain outlook.
Sultan Ahmed bin Sulayem, DP World group chairman and chief executive officer, said 2019 started with trading in line with expectations and while the near-term outlook remains uncertain with the trade war and geopolitical headwinds, the company expects its portfolio to remain resilient and see increased contributions from recent acquisitions and investments.
He said the robust 2018 performance has been delivered in an uncertain trade environment, once again highlighting the resilience of the company's portfolio.
"We have made good progress in delivering on our strategy of strengthening our portfolio to become a global solution provider and trade enabler with approximately $2.5 billion worth of acquisitions announced in the year. These acquisitions offer strong growth opportunities and enhance DP World's presence in the global supply chain as we continue to diversify our revenue base and look at opportunities to connect directly with the owners of cargo and aggregators of demand," said Bin Sulayem.
"Going forward, we aim to integrate our new acquisitions and drive synergies across the portfolio with the objective of removing inefficiencies in global trade, improving the quality of our earnings and driving returns," he said.
The board of DP World has recommended increasing the dividend to shareholders by 5 per cent to $365.9 million, or 43¢ per share.
In 2018, DP World handled 71.4 million twenty-foot equivalent units across its global portfolio, 1.9 per cent more than the previous year. DP World's earnings beat the mean estimate of eight analysts for a profit of $1.17 billion and revenue of $5.3 billion.
The company's capital expenditure reached $908 million in 2018, below its guidance of $1.4 billion as it contained spending in response to the uncertain trade environment, statement said.
DP World, which operates Jebel Ali and the Mina Rashid port, plans to spend between Dh500 million and Dh1 billion to expand Jebel Ali Free Zone this year and is scouting for new acquisitions.
- issacjohn@khaleejtimes.com

• Infrastructure