UAE: DP World Increases Profit by 36 Pct in First Six Months of 2011

DP World today announced financial results from its global portfolio of marine terminals for the first six months of 2011, reporting profit after tax before separately disclosed items of S281 million, 36% ahead of the same period last year. After separately disclosed items, which include a significant one off gain from the monetization of 75% of DP World’s Australia terminals, DP World made a profit of S741 million for the six month period.

Highlights:

• Gross volumes of 26.2 million

• Revenue of $1,502 million

• EBITDA of $645 million with record EBITDA margin of 42.9%

• Profit after tax 36% ahead of prior period at S281 million

• Leverage (net debt to EBITDA) reduced to $3.7 billion and 2.9 times2

Gross volume growth was 11% ahead of the prior year, leading to good revenue growth across terminals. In conjunction with a continued focus on cost management and improving terminal efficiencies, this has led to an increase in EBITDA to S645 million, and EBITDA margin well ahead of expectations at 42.9%.

In March 2011 DP World formed a strategic partnership in the Australia region, monetizing 75% of DP World’s Australia terminals, resulting in a large one-off profit. Profit after tax after separately disclosed items, which includes this profit from the Australian transaction, was S741 million. This has resulted in reported earnings per share of 0.85 cents for the first half of the year, which is four times greater than the prior period. The proceeds of this transaction, along with the stronger performance of terminals, have also reduced our net debt to S3.7 billion and leverage to 2.9 times.

In the UAE region, volume growth of 11% resulted in revenue of S455 million, with container revenue growth of 13% and non-container revenue growth of 8%. DP World have seen the UAE benefit from improved economic growth driven by an increase in trade, tourism and investment in infrastructure.

Those terminals which have recently joined our portfolio, such as Callao (Peru), or received significant investment, such as Dakar (Senegal), have delivered strong performances. They have benefited from the synergies of being part of  global portfolio and are maturing into cash generative operations.

In the first half of the year DP World opened  new development at Vallarpadam (India), which replaces our old terminal in Cochin. We also completed a major expansion project at Karachi (Pakistan). Both of these projects are now fully operational and are making good progress.

Chief Executive, Mohammed Sharaf commented:

“DP World has had an excellent start to the year with gross volume growth 11% ahead of the prior year. Our continued focus on cost management and improved terminal efficiencies have resulted in EBITDA of S645 million and improved EBITDA margin ahead of expectations at 42.9%.

‘Profit for the six month period before separately disclosed items was $281 million, close to profit levels last seen at our peak in 2008 as our container terminals have become more profitable following initiatives implemented as a result of the 2009 downturn. Our global portfolio, focused on both origin and destination cargo and in the emerging markets, is now more robust and better positioned to deliver profitable growth.

“Historically the second half of the year has been stronger than the first half. However, as we said in our update in July, there is uncertainty around the outlook for the global economy making it more challenging to forecast how global trade will develop in the second half of the year.

“The impact of this uncertainty has not, as yet, been reflected in the markets in which we operate and, with our focus on the more resilient emerging markets, we still expect to deliver full year results in line with expectations.”

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Source: dpworld, August 25, 2011;