DP World on track for growth ahead of markets as first-quarter volumes rise

Dubai-based port operator says geopolitics creating uncertainty

DP World is planning a major logisitics hub in Ethiopia. Charles Crowell / Bloomberg

DP World, the Dubai-listed company that operates ports from Peru to China, remains on track to expand this year after first-quarter volumes increased, despite some potential volatility.

“While the trade environment may appear more benign, geopolitical headwinds in some regions continue to pose uncertainty,” Sultan bin Sulayem, DP World’s chairman, said. “We still expect to grow ahead of the market and see increased contributions from our new investments.”

Consolidated throughput at its terminals rose 6.6 per cent to 9.2 million twenty foot equivalent container units during the first three months of the year, DP World said in a statement to the Nasdaq bourse. Gross container volumes increased 7.3 per cent on a reported basis to 17.6 million TEUs, compared with 16.4 million a year earlier, led by growth in Europe, Middle East and Africa.

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The state-owned company faced a series of difficulties in doing business in Africa this year, where it became involved in legal challenges to its operations in Djibouti and Somaliland. That did not deter it from investing in Africa, where it remains bullish on the market's growth potential, announcing in March it would invest $1.2 billion in the deep-water Port of Banana in the Democratic Republic of Congo.  
DP World's terminals in Europe, Middle East and Africa, which includes the UAE, recorded the strongest growth in the first quarter, up 9.8 per cent. Container volumes at its UAE terminals grew by 2.9 per cent to 3.8 million TEUs.

“Following a strong year for the global container market in 2017 with peak levels since 2011, our portfolio has had an encouraging start to 2018 delivering ahead-of-market growth,” Mr bin Sulayem said. “We have the relevant capacity in the right markets.”

The company said its volumes grew ahead of Drewry Maritime’s industry estimate of 4.6 per cent global throughput growth in the first quarter.

DP World expects to spend $1.4bn on capital expenditure this year with investments planned mainly in the UAE, Ecuador, South Korea, Mozambique and Egypt.