Dubai's DP World reports rise in 2019 profit
Reuters - Revenue rose 36.1 per cent to 7.7 billion.
Published: Wed 11 Mar 2020, 10:08 AM
Last updated: Wed 11 Mar 2020, 10:00 PM
Global port and logistics giant DP World reported on Wednesday 4.6 per cent surge in net profit for 2019 on the back of increased trade and returns from acquisitions.
The Dubai-based company, which runs container terminal operations in more than 40 countries, said in a statement that it posted a net profit of $1.33 billion in 2019, compared to $1.27 billion the previous year.
DP World, which last month announced that it would be delisting from the Nasdaq Dubai and returning to full private ownership, said its revenue for the year rose 36.1 per cent to $7.67 billion, with important contributions from the latest acquisitions.
They included P&O Ferries in the UK, Topaz Energy & Marine in the UAE, and two terminals in Chile - Puerto Central and Puerto Lirquen - as well as the full-year impact from Continental Warehousing Corp. in India, Cosmos Agencia Maritima in Peru, and the Unifeeder Group in Denmark.
DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, said the impressive performance delivered in an uncertain trade environment once again highlighted the resilience of its portfolio.
"Following the planned delisting, the leverage on the balance sheet will rise temporarily but we are confident of de-leveraging as we remain committed to a strong investment-grade rating in the medium term," said Sulayem.
"The business continued to generate high levels of cash flow and combined with a more disciplined investment and potential capital recycling, we have enough flexibility to maintain a strong balance sheet. Our immediate focus is to integrate our acquisitions and explore synergies with the objective of providing a range of smart end-to-end solutions which will improve the quality of our earnings and drive returns," he said.
Sulayem said the near-term outlook remains a cause for concern with global trade disputes, Covid-19 outbreak, and regional geopolitics, causing disruption to trade. "However, DP World is well-positioned to respond in the short term by focusing on disciplined investment and managing the cost base to protect profitability. Overall, we remain positive on the medium to long term outlook of the industry."
DP World said the shutdown in China hit demand, but in recent weeks it had bounced back.
"We haven't seen any significant impact (overall) of COVID-19, however, it remains a cause of concern", finance chief Yuvraj Narayan said on a phone call with reporters on Wednesday.
"We will have a clearer picture of the impact probably through the middle of April, if there is any." The Board of DP World has recommended a dividend of $332 million at 40 US cents per share, which is in line with the past policy of maintaining a payout ratio of at least 20 per cent.
DP World capital expenditure for the year stood at $1.1 billion - short of the planned $1.4 billion. This year the company plans to invest up to $1.4 billion, it said. In 2019, DP World handled 71.2 million box containers in 2019, flat compared with the previous year. Volumes at its flagship Jebel Ali port in Dubai fell 5.6 per cent.