DP World profits up 48 percent even as business declines

Dubais port operator DP World announced on March 25 a 48-percent growth in profits in 2008, despite declining business in the final quarter due to the global financial crisis. Net profits surged 48 percent to 621 million dollars last year, compared to 420 million dollars in 2007, DP World said.
Mohammed Sharaf, CEO of DP World, gave no figures on the last three months of 2008, though he told reporters at a briefing that "the volume started softening (in the last quarter) and continues to soften." "As business declines, the margins will decline ... Nobody knows where is the bottom."
DP World, one of the largest marine ports operators in the world, announced in January that it was reviewing expansion plans and freezing recruitment faced with a slowdown in the container terminal industry. "The volume deceleration we saw in the last quarter of 2008 has continued into early 2009 and shows little sign of easing in the foreseeable future.
"Falling utilisation rates across container terminals globally mean the demand for new capacity in the short term is much diminished," the companys chairman Sultan bin Sulayem said in a statement.
"In response we have deferred approximately 50 percent of our planned capacity expansion plans until such time as higher utilisation rates return," Sulayem said.
Sharaf told reporters the company had had to cut a number of jobs, without giving details. "In certain locations where the volumes have drastically declined, there was a necessity to cut jobs, we have done that," he said.
The company announced an eight-percent decline in consolidated volume during the first two months of 2009 across the group, compared to the same period last year.
But the impact of the credit crunch in the Middle East will be softer than in other regions of the world, chief financial officer Yuvraj Narayan told reporters.
"Business in the Middle East is showing much more signs of being robust ... than Europe or Asia," he said. "We have no refinancing risks at all right up till 2012. We dont need any new cash for the next 3 years."