Port operator DP World reports higher profits on rising volumes

Dubai’s DP World reported a 7 per cent increase in profit to $1.2bn for 2017 on rising volumes that the port operator said had outperformed the market. Full-year revenue grew 13.2 per cent to $4.7bn, driven by gross throughput growth of 10 per cent to 70m twenty-foot equivalent units as global trade rebounded.

The company, which is controlled by the Dubai government, gave an optimistic forecast for 2018 despite political concerns.

“We have made an encouraging start to the year with current trading in line with expectations,” Sultan bin Sulayem, DP World Group’s chairman, said in a statement.

“As we look ahead into 2018, geopolitical headwinds in some regions pose a challenge but we expect to continue to grow ahead of the market and see increased contributions from our recent investments,” he added.

The company said it had invested $1.1bn last year, less than its guidance of $1.2bn. It forecast capital expenditure of $1.4bn in 2018, including investment into its home base in the United Arab Emirates, Posorja in Ecuador, Berbera in Somaliland, Pusan in South Korea, Maputo in Mozambique and Sokhna in Egypt.

Gross global capacity of 88m TEU is expected to grow to more than 100m TEU by 2020, it said.

The government of Djibouti last month terminated DP World’s concession to run its port in the East African country, in a move described as “oppressive and cynical” by the Dubai company, which has since opened arbitration proceedings in a bid to secure damages.

DP World, which has been in legal dispute with Djibouti for several years, is investing in nearby Somaliland, where earlier this month it agreed to develop a business and logistics park as it seeks to turn Berbera port into “a regional maritime hub for the Horn of Africa”.

SOURCE: FINANCIAL TIMES