DP World profit leaps 22%

DP World on Thursday announced a 22 per cent increase in net profit for the first six months of the year and its chairman said Iran, Africa and Latin America are future growth markets.

"We are very interested in emerging markets and Africa is top of our list of places where we would like to expand, as well as the Pacific side of Latin America," DP World chairman Sultan Ahmed bin Sulayem told reporters on Thursday.

"Africa has a huge global advantage, significant construction activity and we are studying locations for potential expansion," he explained.

The chairman also mentioned that the Dubai company is also in talks with authorities to start port operations in Iran.

"Iran has a good land bridge of rail that will connect the Silk Route from China to Europe," Bin Sulayem added.

The company, one of the world's largest port operators with a portfolio of more than 65 terminals globally, reported a 21.9 per cent net profit rise, helped by the acquisition of logistics infrastructure firm Economic Zones World to $405 million.

Its revenues were up 14.5 per cent. Capital expenditure guidance for 2015 remains unchanged at between $1.6 billion and $1.9 billion. Bin Sulayem told reporters growth in the Asia-Pacific had been particularly strong despite uncertain market conditions, and insisted that the company had yet to see any impact from China's stock market meltdown this week.

The financial performance has been achieved despite uncertain market conditions, which once again demonstrates the well-diversified and resilient nature of DP World's portfolio, he said, adding: "In 2015, we have invested over $3.5 billion in acquisitions and expansionary capex, and this investment leaves us well placed to capitalise on the significant medium to long-term growth potential of this industry."

"We remain on course to deliver over 100 million TEU of capacity by 2020, while maintaining the existing shape of our portfolio that has a 70 per cent exposure to origin and destination cargo and 75 per cent exposure to faster-growing markets. This positioning will enable us to deliver both earnings growth and shareholder value over the long term," he added.

Group chief executive Mohammed Sharaf said: "We report solid first half financials with 14.5 per cent revenue growth and 18.8 per cent Ebitda growth. Encouragingly, like-for-like revenue growth continues to outpace throughput growth which demonstrates the pricing power within the portfolio."

"Our capex programme remains on track and we have added over three million TEU of new capacity in the first half of 2015 with our projects in Rotterdam [Netherlands] and Nhava Sheva [India] now operational. Yarimca [Turkey] and the second phase of Terminal 3 Jebel Ali are on track for the second half of 2015. We believe this additional capacity will contribute to growth in the coming years and deliver enhanced returns to shareholders over the medium term."

"The near-term outlook remains uncertain with limited visibility. However, we believe our business is well-positioned to continue to outperform the market. We remain focused on delivering relevant new capacity in the right markets, improving efficiencies and managing costs to drive profitability. Our first half performance underpins our confidence in meeting full year market expectations," he added.
Source: Khaleej Times