DP World rides out global storm to post rise

A ship is docked at the DP World container berth at the Port of Brisbane in Australia. Eric Taylor / Bloomberg News

DP World, the global ports company based in Dubai, cited continuing "global economic uncertainty" as it announced profits for the first half of last year.

The company's Middle East operations, especially its flagship port at Jebel Ali in the UAE, were the mainstay of what the chief executive Mohammed Sharaf called a "resilient" performance.

The top line pre-tax profit figure of US$310 million (Dh1.13 billion) was reported "on an underlying basis" to reflect the sale of the Australian ports businesses last year.

Without that adjustment, which has been standard reporting practice for DP World for the past three sets of figures, profits attributable to shareholders would have been $247m, just 1.5 per cent ahead of last year.

"These profits are certainly not flat. On an underlying basis, we saw container volumes rise 7.5 per cent, revenues 9.9 per cent ahead, earnings before interest, depreciation, tax and amortization (ebitda) growth of 10.6 per cent, and pre-tax profits growth at 12.1 per cent. We are doing something right," said Yuvraj Narayan, the chief financial officer.

Mark McVicar, an analyst at Nomura Equity Research, said the attributable profit figure was some 10 per cent ahead of his expectations and he upgraded full-year forecasts. Mr Sharaf said DP World container volume had also risen.

"In a challenging global macroeconomic environment, DP World handled 7.5 per cent more containers than during the same period last year and outperformed industry volume growth, leading to an increase in our market share."

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He added the Middle East performance "mitigated weaker trade across continental Europe ... the global economic uncertainty seen in the first half has continued into the second".

Sultan Ahmed bin Sulayem, the DP World chairman, said the results were "excellent, despite the challenging period we faced. They reflect our wise decision to expand in emerging markets".

"DP World continues to focus on building or enhancing leading positions in markets which are faster growing or where infrastructure is insufficient to meet the needs of its customers. Our long-term approach to investment has allowed DP World to build a global portfolio of container ports, with resilience to the instability affecting parts of the global economy today, as well as positioning DP World to be at the forefront of industry growth for many years to come."

On the Nasdaq Dubai the stock edged 1.08 per cent higher to $10.31. In later trading in London, where the shares are also quoted but in sterling, they edged up 1.93 per cent to 660p.

The consensus among the 14 analysts who research the stock is underlying profit before tax will reach $650m this year, a rise of about 10 per cent.

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