Monday, August 22, 2016

Port and Logistics Giant DP World Reports Revenue Up Despite Container Freight Climate

First Six Months of 2016 Appear Up to the Mark
Shipping News Feature
UAE – Strong trading figures from Dubai based port and logistics group DP World for the first half of the year has prompted it to reiterate that the company will continue with its investment plans for the rest of 2016. Despite a challenging environment in the global ocean freight market, DP World says it saw revenue growth for the period of 10.2% supported by the acquisitions of Jebel Ali Free Zone (UAE) and Prince Rupert (Canada), revenue rising to $2,094 million. Container traffic revenue, up 4%, drove an overall like for like revenue hike of 2.5%, with TEU up 5.4% per unit.

DP World invested a capital expenditure of $586 million with an intent to stick to the planned $1.2-1.4 billion overall investment in 2016 principally in Jebel Ali (UAE), Jebel Ali Free Zone (UAE), London Gateway (UK), Prince Rupert (Canada), JNP Mumbai (India), and Yarimca (Turkey). DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented:

“DP World is pleased to announce a strong set of first half results, with 50% year-on-year earnings growth, and 56% adjusted EBITDA margins. The more modest like-for-like 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.

“We will maintain the existing shape of our ports portfolio that has a 70% exposure to origin and destination cargo and 75% exposure to faster growing markets. This positioning will enable us to deliver both earnings growth and shareholder value over the long term.”

“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.

“Looking ahead to the second half of the year, we expect throughput performance to improve, and like-for-like financial performance (excluding one-off items and foreign exchange movements) to be similar to the first half. Overall, the strong financial performance of the first six months leaves us well placed to meet full-year market expectations.”

To precis the results, as stated revenue grew 10.2% whilst adjusted EBITDA increased by 27.2%, adjusted EBITDA margin of 56.2%, delivering profit attributable to owners of the Company, before separately disclosed items, of $608 million, up 50.2%, and EPS of 73.2 US cents. On a like-for-like basis, revenue grew 2.5% and adjusted EBITDA increased by 6.6%, adjusted EBITDA margin of 51.8%, attributable earnings up 4.3%, reflecting the challenging global trade environment.