DP World on course to defy global headwinds

DP World container volumes rose 10 per cent in the third quarter, helping the ports operator remain on course to hit profits expectations this year.

DP World container volumes rose 10 per cent in the third quarter, helping the ports operator to remain on course to hit profits expectations this year despite an uncertain global maritime outlook.

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The UAE, the Asia-Pacific region, Africa and the Americas were the biggest drivers of the growth, DP World said yesterday.

Volumes from newly acquired operations in Suriname, Callao in Peru and Qingdao in China also helped to boost output.

"Whilst uncertainty continues to affect the global economy our business continues to perform well," said Mohammed Sharaf, the chief executive of DP World.

"Despite the tougher fourth-quarter comparatives, we continue to believe that we will achieve full-year Ebitda [earnings before interest, taxes, depreciation, and amortisation] in line with expectations."

Gross volumes reached 14.4 million TEUs (twenty foot equivalent units) during the quarter, compared with 13.1 million TEUs a year ago.

Gross volumes for the first nine months of the year were 40.6 million TEUs, 11 per cent up from the same period last year.

Removing the performance of volumes from new terminals in Callao and Qingdao, like for like gross volumes still rose 9 per cent.

The results helped to lift DP World's stock by 0.94 per cent to close at US$10.7 on Nasdaq Dubai.

DP World is managing to buck a downtrend in the shipping industry caused by a souring of the global economy and the fall-out from the European sovereign debt crisis. The World Trade Organization last month dropped its annual growth projection for merchandise trade in volume to 5.8 per cent from the 6.5 per cent it predicted in April.

But the world's third-largest ports operator has remained focused on increasing its capacity by more than a third by 2020. It aims to reach its goal through acquisitions and increased infrastructure at existing ports, especially in faster-growing emerging markets.

Among the best-performing markets in the third quarter were the Asia-Pacific region and the Indian subcontinent, where gross volumes rose from 5.8 million TEUs in the third quarter of last year to 6.5 million TEUs in the same period this year. Europe, Africa and the Middle East grew from 5.7 million in the third quarter of last year to 6.2 million.

The Americas and Australia expanded from 1.6 million to 1.7 million.

"The UAE region has continued to do well with the third quarter delivering excellent growth as Dubai continues to strengthen its position as a global trading hub for the fast-growing economies of the Middle East, India and Africa," said Sultan Ahmed bin Sulayem, the chairman of DP World.

A gain from the sale of its Australian unit helped DP World to post a better-than-expected rise in first-half profit.

Net profits quadrupled to $705.3 million (Dh2.59 billion) from $176.6m a year earlier, it said in August.

One of Dubai World's more profitable units, DP World had more than $4bn on its balance sheet as of June 30.

Its cash cushion helped it to secure a 20-year financing arrangement with a group of global banks to fund its UK London Gateway development.

The company is ploughing $1.6bn into the new port and logistics park in Thurrock, Essex, with a fourth-quarter 2013 completion date slated.