Port operator DP World said on Tuesday its 2009 results would be in line with market expectations but warned of a challenging fourth quarter ahead, particularly in the United Arab Emirates and nearby regions. The firm also said, in a separate announcement, its chief financial officer would step down at its December board meeting and join state-linked parent company Dubai World as group CFO, adding that no replacement had yet been found.
Container volumes declined 8 percent in the nine months to September 30, compared with the same period in 2008, DP World said in a statement on the Nasdaq Dubai exchange website. "The final quarter of 2009 will continue to present challenges with tough prior year comparators, particularly in the UAE region where we also anticipate a continuation of significant non-container revenue declines," Chief Executive Mohammad Sharaf said in the statement.
The international shipping industry has been hard hit by the global economic downturn, largely due to overcapacity caused by a construction boom that took place before the slump began. The slump in world trade has also hit freight rates and volumes.
The company said volumes in the third quarter in the UAE region were in line with the same period last year, reflecting continued resilience in the Middle East, Indian and African regions. "We are encouraged that trading in the third quarter of this year has seen volumes begin to stabilise after the significant declines of the first half," Sharaf said.
"We are beginning to see early signs of stability across the industry and container volumes across our three reporting regions all reported more containers handled in the third quarter of this year than in the second quarter." DP World is owned by the Dubai government-linked conglomerate Dubai World, whose real estate unit, Nakheel, has been the subject of much concern over how it would meet debt obligations.
The port operator has said it has postponed some of its own capacity expansion plans - including the London Gateway project which combines a deep sea container port with a logistics park on the Thames east of London - to focus on developments nearing completion. Last week, bankers said that DP World is sounding out banks for a loan backing the construction of the London Gateway.