DP World diversification push pays off in H1 2018 results
DP World has announced robust financial results for the six months to 30 June 2018, with its focus on diversifying away from pure port operations paying dividends.
On a reported basis, revenue grew 14.4%, while profit reached US $593 million.
On a like-for-like basis, revenue grew 3.0% and adjusted EBITDA increased by 4.2% with adjusted EBITDA margin of 54.4%, and attributable earnings to owners of the Company increased up by 5.2%, reflecting the stable trading environment.
The revenue growth was driven by containerised volume growth across all three regions and the impact of new acquisitions including Drydocks World LLC (Drydocks), Dubai Maritime City (DMC) and Cosmos Agencia Marítima (CAM), the company said in a statement.
DP World said that profit growth was slightly hampered by the deconsolidation of Doraleh (Djibouti) and consolidation of DP World Santos (Brazil), which remains in ramp up stage.
However, the group’s revenues have been supported by investment of US $439 million invested across the portfolio during the first half of the year as DP World further diversifies its operations.
“We have made good progress in delivering our strategy of strengthening our portfolio of complementary and port related business with approximately US $1.400 billion of acquisitions announced recently,” said Sultan Ahmed bin Sulayem, chairman and CEO of DP World.
“These acquisitions offer strong growth opportunities and enhance DP World’s presence in the global supply chain as we continue to diversify our revenue base and look at opportunities to connect directly with the owners of cargo and aggregators of demand,” he added.
The acquisition of Drydocks, which closed in the beginning of 2018, is performing in line with expectations and there has been an increased contribution to DP World’s revenue line.
At 1H2018, non-containerized revenue accounted for approximately 37% of total revenue, up from 31% in 1H2017, the group said in a statement.
Furthermore, DP World continued to invest in complementary sectors and acquired three more strategic assets – the integrated multimodal logistics players Continental Warehousing Corporation (CWC) in India, Cosmos Agencia Marítima in Peru, and the Unifeeder Group in Denmark, which operates the largest container common user feeder and growing shortsea network in Europe.
DP World has also signed a 20-year concession to build and operate a modern logistics hub outside of Bamako, the capital and largest city of the Republic of Mali and has won a 30-year concession for the management and development of a greenfield port project at Banana in the Democratic Republic of the Congo.
Capital expenditure guidance for 2018 remains unchanged at up to $1.4 billion with investments planned into UAE, Posorja (Ecuador), Berbera (Somaliland), Sokhna (Egypt) and London Gateway (UK).
“The near-term trade outlook remains uncertain with recent changes in trade policies and geopolitical headwinds in some regions continuing to pose uncertainty to the container market. However, the robust financial performance of the first six months also leaves us well placed for 2018 and we expect to see increased contributions from our recent investments in the second half of the year,” said Sulayem.