DP World profits sink to $333m as pandemic hits container volumes
DP World reported a 55.7 percent drop in profits for the first six months of the year to $333 million in what has been described as “one of the most challenging periods” in the company’s history, as it battles against the effects of the global Covid-19 pandemic.
The company reported revenue growth of 17.7 percent to just over $4 billion, supported by acquisitions particularly of Topaz Energy and Marine and P&O Ferries, although its like-for-like revenue dropped by 11.6 percent and down 3.4 percent, excluding an Emaar land sale in 2019.
DP World Group chairman and CEO, Sultan Ahmed Bin Sulayem, said: "The Covid-19 outbreak has undoubtedly resulted in one of the most challenging periods in the history of our industry.
“Our gross volumes have declined by 3.9 percent in H1 2020 which compares favourably against an estimated industry decline of ten percent. However, our like-for-like EBITDA, excluding land sale in the prior period, has grown by 1.1 percent during this period which demonstrates that we have managed costs efficiently.
“This outperformance once again demonstrates that we are in the right locations and a focus on origin and destination cargo will continue to deliver the right balance between growth and resilience.”
DP World’s cash from operating activities “remains strong” at $1,124m for the first half of the year, compared to $1,046m for the same period last year.
The company invested $330m in the region in the opening six months of 2020, mainly focused on capacity expansions in the UAE, Sokhna (Egypt) and Berbera (Somaliland).
Earlier this year, DP World de-listed its equity from the stock exchange and returned to private ownership.
Bin Sulayem said: “Our ability to adapt and change has been the key to our success, and we must continue to evolve for continued growth. We believe this long-term approach to business is not aligned with the short term thinking of equity markets and consequently the next stage of DP World's development will take place as a private company.”
Despite handling 33.89m tonnes in H1, a drop of 5.3 percent, Bin Sulayem remained optimistic for the future.
“Overall, we are encouraged that our business has performed better than expected given the Covid-19 pandemic and, while the outlook is still uncertain, we remain positive on the medium to long-term fundamentals of the industry,” he said.
Source: Arabian Business