Dubai's Topaz swings to second-quarter profit as revenue climbs

DP World, one of the biggest global ports operators, acquired Topaz in July

FILE PHOTO: An offshore oil platform is seen in Huntington Beach, California September 28, 2014. Brent oil prices fell more than $2 a barrel to less than $88 on Monday, its lowest since 2010, after key Middle East producers signalled they would keep output high even if that meant lower prices. Brent oil prices have tanked by nearly 25 percent since June as ample supply coincided with weak demand, raising the possibility that the Organization of the Petroleum Exporting countries could cut output.  Picture taken September 28, 2014. REUTERS/Lucy Nicholson/File Photo
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Topaz Energy and Marine, a Dubai-based offshore support vessel company bought by DP World in July, swung to second-quarter net profit as revenue climbed.

Net profit after exceptions for the three months to end of June climbed to $25 million (Dh91.8m) from a $1m loss reported for the same period in 2018, the company said on Tuesday. Revenues for the reporting period also rose 42.4 per cent to $121m, it added.

The company’s first-half net income also surged to $42m from a $4m loss recorded at the end of first six months of 2018. Revenues jumped 56 per cent year-on-year to $235m. Earnings before interest taxes, depreciation and amortisation rose by 83 per cent to $141m in the first half.

A rise in average day rate by 16 per cent to $17,361 during the first half also helped profitability, it added.

DP World, one of the biggest global ports operators by cargo tonnes handled, acquired Topaz from Oman's Renaissance Services and Standard Chartered's private equity arm for an enterprise value of $1.08 billion (Dh3.96bn) in July.

“DP World recognises the success we have achieved and wants us to continue to deliver that going forward. Testament to this success, are our results for the first half of 2019,” said René Kofod-Olsen, chief executive of Topaz Energy and Marine.

“The acquisition concludes our journey to deliver the right solution for our current shareholders, combined with a strong future capital structure for the company, creating the necessary liquidity to provide Topaz with a sustainable future.”

DP World expects the Topaz acquisition to be earnings-accretive from the first full year of consolidation and to meet DP World's return on investment targets, it said in July. Topaz works with oil majors BP, Chevron, ExxonMobil and Saudi Aramco. It has a contract backlog of $1.6bn as of March 31, according to DP World.

The deal marked the ports operator's first foray into the oil and gas sector. DP World has been on an investment spree since 2018 as its growth strategy evolves to include the wider logistics supply chain. It snapped up UK-based transport and logistics company P&O Ferries, Indian rail logistics company Kribhco Infrastructure and Chile ports operator Puertos y Logistica.