DP World to meet profit forecast after strong first half

GLOBAL ports operator DP World achieved a first half net profit of US$176.6 million, up slightly from $175.3 million a year ago

The result was attributed to growth in the group`s container shipping segment, chiefly from terminals located in Asia, Australia and Europe, as well as to cost-cutting that cut expenses five per cent, the company said.


First half revenue rose by 5.1 per cent to $1.45 billion. Ebitda margin rose to 39.9 per cent in the first half, up from 38.7 per cent a year ago.


Container volume at DP World`s 28 ports rose by seven per cent year on year to 13.2 million TEU. Volumes increased 24 per cent in the Americas and Australia, 22 per cent in Asia Pacific and the Indian subcontinent and eight per cent in Europe, Africa and the Middle East.


"Two new container terminals becoming operational during the second half is expected to support volume growth and thereby earnings," Joice Mathew, senior manager at United Securities LLC in Muscat, Oman, was quoted as saying in a Bloomberg report.


DP World said it plans to open terminals in Vallarpadam, India, and Karachi, Pakistan, this year after opening a port in Callao, Peru.


"Across our global portfolio our second half is traditionally better than the first," said DP World`s chief financial officer Yuvraj Narayan, according to London`s Containerisation International. "Australia has been very strong, America has been strong, we have seen an improvement in Europe and we have seen a lot of resilience in the Middle East and the subcontinent as well."


Looking ahead, DP World`s CEO Mohammed Sharaf said: "Uncertainty remains over the sustainability of global trade volumes. However, we expect the second half to deliver stronger results than the first half of the year as our terminals benefit from seasonal trade flows and the contribution from new terminals [an expected additional two million TEU of handling capacity].


Analysts expect the company to post for the whole of 2010 Ebitda of $1.2 billion. "In addition to some ongoing improvement in non container revenues and continued cost management programmes, we are on track to meet full year results in line with our expectations," said Mr Sharaf.


DP World`s container volume fell eight per cent in 2009. This July parent Dubai World presented a plan to creditor banks to delay repaying $14.4 billion of loans. The state-owned holding company said the port operator is not part of its debt restructuring plan.