DP World reports 46% fall in profit

Dubai ports operator DP World said net profit fell 46 per cent last year because of declining container and cargo volumes worldwide

DP World, the world's fourth-largest port operator, today said net profit declined 46 per cent last year, because of falling container and general cargo volumes worldwide as global trade slumped during the downturn. The company booked profits of US$333 million (Dh1.22bn), down from $621m in 2008 after it handled 25.6 million containers. DP World's container volume was down 8 per cent from a year earlier but was less than the 12 per cent decline industrywide, the company said.

DP World was heavily affected by a fall in general cargo, in particular at its flagship port in Jebel Ali, as a slowdown in UAE property development caused imports of raw materials to drop, said Yuvraj Narayan, the chief financial officer of DP World. "The non-container business decline in Jebel Ali is just a straight reflection of the decline in the activity in the real estate sector," Mr Narayan said. Local imports for housing materials could remain sluggish for the next one to two years, he added.

The company, which operates terminals in 31 countries, said the first two months of this year offered hopeful signs as demand grew by 4 per cent. But it remained cautious and recently cut its fixed costs by 7 per cent across its global network, said Mohammed Sharaf, the chief executive of DP World. "It is too early in 2010 to confirm sustainability," Mr Sharaf said. @Email:[e-mail]