DP World fourth-quarter container volumes rise 2.4%

Volume performance leaves port operator well placed to deliver improved full-year financial results, chief says

Port operator DP World outperformed the industry's annual forecast last year. Photo: DP World

Global ports giant DP World reported a 2.4 per cent increase in gross container volumes for the fourth quarter of last year, positioning the company for "improved" full-year financial results, it said.

The Dubai-based ports operator handled 19.5 million twenty-foot equivalent units (TEUs) across its global portfolio of terminals in the three-month period to the end of December, DP World said on Monday.

DP World's fourth-quarter gross volume growth was mainly driven by Asia Pacific and India, though overall growth rates for the period moderated as expected due to "challenging" global economic conditions, it said.

The company also reported a 2.8 per cent increase in annual container shipping volumes for last year, outperforming the industry forecast, but warned of geopolitical and economic uncertainty next year.

DP World said it handled 79 million TEUs across its portfolio last year, with all the regions in which it operates recording like-for-like growth during the year.

The annual throughput results are "once again ahead of industry forecast of a marginal decline of 0.5 per cent," said Sultan Ahmed bin Sulayem, group chairman and chief executive of DP World.

"This outperformance continues to demonstrate that we are in the right locations and our strategy to offer integrated supply-chain solutions to beneficial cargo owners is bearing fruit."

The World Trade Organisation forecast a slow down in trade growth in the closing months of 2022 and into this year as the global economy continues to be "buffeted by strong headwinds", according to its latest Goods Trade Barometer on November 28.

This is in line with the WTO's forecast of world merchandise trading (an average of import and export) to increase by 1 per cent this year, compared with 3.5 per cent growth last year. This is due to several shocks including the war in Ukraine, high energy prices and monetary tightening in major economies, it said.

The International Monetary Fund expects world trade growth to decline this year to 2.4 per cent, despite an easing of supply bottlenecks, before rising to 3.4 per cent next year, according to its latest outlook in January.

DP World's annual container shipping volumes growth was largely driven by the Asia Pacific, Americas and Australia regions.

Its flagship Jebel Ali port in Dubai handled 14 million TEUs last year, up 1.7 per cent from 2021 on a like-for-like basis. Its origin and destination cargo grew by 8.6 per cent last year.

“Overall, we ... remain focused on growing profitability while managing growth capex," Mr bin Sulayem said. "The solid volume performance leaves us well placed to deliver an improved set of full-year results.

"Looking ahead to 2023, we expect our portfolio to continue to deliver growth but the outlook remains somewhat uncertain due to rising inflation, higher interest rates and geopolitical uncertainty."

World trade and container volumes will receive a boost from China’s reopening, helping to ease the economic situation, though there will not be an immediate sharp upswing, Mr bin Sulayem told Bloomberg during the World Economic Forum meeting in Davos last month.