Profits surge at DP World

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A view of the DP World terminal in the Chinese port city of Qingdao.

DP World announced its H1 results for year 2011 with a profit of $281 million, 36% ahead of previous year.

The monetisation of 75% of DP World?s Australia terminals enabled DP World to earn a profit of $741 million for the six month period.

DP World is one of the largest marine terminal operators in the world, with 49 terminals?and 9 new developments and major expansions across 31 countries. DP World effectively manages container, bulk and other terminal cargo across different destinations.

The gross volumes for the first six months of the year were 26.2 million TEU ($1, 502 million) or 11% than its previous year. The earnings before interest, tax, debt and amortisation (EBITDA) was $645 million, which is a record margin of 42.9%. The leverage against EBITDA was reduced to $3.7 billion.

The performance was driven by strong growth in the Asia Pacific, UAE, Africa and Americas regions, as well as from its recently opened capacity in Callao, Peru and Qingdao, China.

The portfolio of consolidated terminals handled 13.5 million TEU (twenty foot equivalent unit) in the first six?months of the year.? The consolidated volume growth in the ?first half was 8%.

The UAE alone handled 6.1 million TEU in the first six months of the year, with a record 3.1 million TEU in April, May and June.


DP World ?continued its focus on cost management and improved terminal efficiencies, which led to an impressive EBITDA (earnings?before?interest,?taxes,?depreciation, and?amortisation) to $645 million.

The earnings per share rose of 0.85 cents for the first half of the year, which is four times greater than the prior period.

The net debt has been reduced to $3.7 billion, a leverage by 2.9 times, the company said.

In the UAE region, volume growth of 11% resulted in revenue of $455 million, with container revenue growth of 13% and non-container revenue growth of 8%. UAE region with its improved economic growth driven by an increase in trade, tourism and investment in infrastructure has benefitted the DP World.


DP World said in the first half of the year it opened its new development at Vallarpadam, India, which replaces the old terminal in Cochin. It also completed a major expansion project in Karachi, Pakistan.? Both these projects are fully operational and are making good progress.

Chief Executive, Mohammad Sharaf said,?DP World has had an excellent start this year with a gross volume growth of 11%? compared with the previous year. Our continued focus on cost management and improved terminal efficiencies have resulted in EBITDA of $645 million and improved EBITDA margin ahead of expectations at 42.9 per cent.? He added, ?Profit for the six month period before separately disclosed items was $281 million, close to profit levels last seen at our peak in 2008 as our container terminals have become more profitable following initiatives implemented as a result of the 2009 downturn.”

He also expressed his concern at the uncertainty of global economy, adding it is challenging to forecast the performance of the company for the second half of the year.

DP World also bought controlling interest in two port services firms in Suriname last month for an undisclosed amount.

The recently joined terminals such as Callao (Peru), or received significant investment such as Dakar (Senegal) delivered strong performances. DP benefitted from these synergies as well and are maturing into cash generative operations.


DP World, whose shares began trading on the London stock exchange in June, had witnessed a fall by about 22% since its listing. The earnings per share rose of 0.85 cents for the first half of the year, which is four times greater than the prior period.?”Over time, as?markets in general improve, we will see a positive impact on valuation,” said Yuvraj Narayan, the Chief Financial Officer of DP World.

The company was well positioned to meet its $3 billion upcoming debt maturity in October 2012. It had $4.1 billion in cash at the end of June 30, 2011.

Sources: Gulf news, Bloomberg, Reuters

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