DP World, the Dubai-based ports and logistics giant, said the real impact of Covid-19 will be seen from the second quarter onwards after it posted a 1.7 per cent dip in first-quarter shipping container volumes.
The ports operator warned that global trade and container volumes are forecast by industry analysts to decline in 2020, with estimates on the scale of the drop ranging from 3 per cent to 10 per cent, it said in a statement on Thursday.
"The real impact of Covid-19 will be seen from 2Q 2020 onwards," Sultan bin Sulayem, group chairman and chief executive of DP World, said. "The timing of any recovery is uncertain with trade expected to pick-up as and when global economic activity normalises."
DP World said it handled 17.2 million TEU (twenty-foot equivalent units) shipping containers across its global portfolio in the first quarter of 2020, with gross container volumes decreasing by 1.7 per cent year-on-year on a reported basis but up 0.3 per cent on a like-for-like basis.
At its flagship Jebel Ali port in Dubai, it handled 3.4 million TEUs in the first quarter, down 3.4 per cent year-on-year, due to a decline in lower-margin cargo.
DP World, which plans to return to full state ownership, will focus in the near-term on integrating its acquisitions to "drive synergies" and control costs to protect profitability given "the more challenging environment", Mr bin Sulayem said. It will also work on managing capital expenditure to preserve cashflow and maintain its investment grade rating.
"Overall, the outlook is a cause for concern, but we remain positive on the long-term fundamentals of the industry," Mr bin Sulayem said.
