DP World posted a 2.5 per cent increase in container volumes in the first nine months of this year, a slower pace than in the first half owing to weak global economic growth.
The performance of the Dubai-based port operator was in line with expectations.
DP World’s consolidated throughput, or volumes at ports that the company controls, grew on a like-for-like basis to 21.9 million twenty foot equivalent units (TEUs) in the first nine months of this year compared with a year earlier, DP World said.
In the first half of this year, consolidated volume increased 3.5 per cent on a like-for-like basis to 14.38 million TEU compared with a year-earlier period.
DP World had warned in August that profit would moderate in the second half because of weaker global economic growth.
DP World has posted a 22 per cent increase in net profit for the period attributable to owners of the company to Dh405 million in the first half of this year compared with a year earlier.
“Growth rates in the third quarter have softened across the portfolio and the overall macro-economic outlook remains challenging,” said Mohammed Sharaf, group chief executive.
“In the near term, we continue to focus our efforts on improving efficiency and managing costs to maintain profitability. Overall, given the solid first nine month volume performance, we remain confident of meeting full-year market expectations.”
The volume growth in the first nine months is within expectations, according to Wafaa Baddour, an analyst at the Egyptian investment bank EFG-Hermes.
““Slower growth in global trading is expected to continue impacting volume growth,” said Ms Baddour. “However, DP World is well positioned to endure lower growth in global trade and tighter spending by some GCC countries in our view.”
DP World will benefit from last year’s $2.6 billion acquisition of Economic Zones World (EZW), a free zone company in Dubai, and its capacity increases in emerging markets and selected mature markets. It will also benefit from its focus on consumer sector, making it less vulnerable to a forecast of an infrastructure spending slowdown in some Arabian Gulf market.
DP World is forecast to post full-year net profit of Dh857m, which includes revenue from EZW, according to EFG-Hermes. Profit for the period attributable to owners of the company last year grew 11.7 per cent to Dh675m compared with a year earlier.
Volume growth in the first nine months of this year was driven by the UAE and Europe, but performance in the Americas was weak because of economic conditions.
The UAE handled 11.9 million TEU in the first nine months, a 4 per cent increase on a year earlier.
DP World said it expects volume growth to grow next year following the acquisition of a container terminal in Canada, which closed in August.
In April, DP World said it had agreed to acquire Maher Terminal’s Fairview container terminal on Canada’s west coast, its second terminal in Canada, for C$580m (Dh1.6bn) as it seeks to boost its capacity and capture trans-Pacific trade between Asia and North America. The terminal has a capacity of 850,000 TEUs and the expansion will lift its capacity to 1.35 million TEUs in the first half of 2017.
DP World will spend $1.6bn on a new terminal at its flagship Jebel Ali port in a major boost for trade through Dubai. The move will boost capacity by 16 per cent by 2018 and cater to future growth in the UAE and the region
The company plans to boost capacity at its 65-plus ports to 85 million TEU by the end of this year, from 76 million TEU now.
DP World is targeting 100 million TEU of capacity by 2020, depending on market conditions.
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