Dubai DP World first half profit up as volumes, margins rise

DP World, one of the world's largest port operators, reported a 26 percent rise in net profit for the first half of the year on August 28 as its container volumes and margins increased. The company, one of the more profitable assets of debt-laden Dubai World, posted a first-half net profit of $332 million. This compares with a profit of $264 million in the corresponding period of 2013, it said in a statement.
Two analysts surveyed by Reuters had forecast DP World would make a profit of between $290 million and $300 million.
DP World's revenue for the six months ended June 30 was $1.66 billion, up from $1.51 billion a year earlier.
The company's consolidated throughput in the first half of 2014 was 13.9 million TEUs (twenty-foot equivalent units), up 8.5 percent from a year earlier. This refers to volumes only at ports that DP World controls. "The addition of new capacity and a pick-up in global trade have resulted in a return to robust volume growth," DP World chairman Sultan Ahmed Bin Sulayem said in the statement.
"Our portfolio is well-positioned to capitalise on the significant medium- to long-term growth potential of this industry and we continue to seek new opportunities in the faster growing markets."
By 2015, DP World expects to have about 85 million TEUs of capacity globally, including ports in which the company does not have full control, and more 100 million TEUs of capacity by 2020, subject to market demand, it said.
The company's adjusted margin on earnings before interest, tax, depreciation and amortisation (EBITDA) was 46.9 percent in the first six months of this year, up from 45.6 percent in the year-earlier period.
"The near-term outlook remains encouraging, however continued geopolitical issues may result in challenges as the year progresses," chief executive Mohammed Sharaf said in the statement.
"We remain focused on delivering relevant new capacity in the right markets, improving efficiencies, containing costs and handling higher margin containers to drive profitability."
The company, which has a portfolio of about 65 terminals across six continents, signed a $3 billion loan deal last month, improving terms on its debt and raising funds for expansion. It conducted a $1 billion convertible bond issue in June.