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DP World is pessimistic despite strong H1 results

DP World saw a 6.8% increase in first half net profit for 2015 and revenue growth of 14.5% to US $1.9 billion, but is pessimistic about year ahead.
Sultan Bin Sulayem, chairman, DP World
Sultan Bin Sulayem, chairman, DP World

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DP World, the largest port operator in the Middle East, saw a 6.8% increase in first half net profit for 2015, but cautioned that it does not expect to keep up that pace in the second half of the year.

The weaker profit expectations come amid slowing global economic growth, particularly in China.

DP World is also in talks with the Iranian authorities to take advantage of its location there, once sanctions are lifted, according to officials.

"Overall, while we have enjoyed a positive first half, we expect growth rates to moderate in the second half due to softer global GDP growth," Sultan bin Sulayem, DP World chairman, said in a press release.

"However, historically our second half throughput performance has been stronger than the first and we expect that trend to continue," Sulayem said. "The solid financial performance of the first six months leaves us well placed to meet full-year market expectations."

The container market, DP World's bread and butter, is being affected by uncertainties that include the economic outlook in China, and low shipping rates.

DP World's diversified portfolio will help the company weather the economic instability, Sulayem said, predicting that the full impact of the Chinese slowdown would be felt beyond this year's second half.

DP World's revenue grew 14.5 per cent to US $1.9 billion from US $1.66 billion in the year-earlier period, partly due to the acquisition of Economic Zones World (EZW), a free zone company also based in Dubai.

DP World operates the Jebel Ali Port, the largest container port in the world outside Asia, and its adjacent free zone after it acquired EZW from Dubai World, last year for US $2.6billion. Dubai World is a parent company of DP World.

DP World has also acquired a second terminal in Canada for US $489-million as it seeks to boost its capacity and capture trans-Pacific trade between Asia and North America.

DP World's consolidated throughput exceeded 3.5% growth to 14.38-million twenty-foot equivalent units (TEU) in the first half of this year from 13.89m TEU in the year-earlier period.

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