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DP World’s Profits Rise as Sea Cargo Trade Picks Up

Wednesday, 18 Aug 2010 04:00 PM

Global port operator DP World posted higher first-half profits Wednesday, helped by a pickup in world trade that pushed cargo volumes at ports it controls up 7 percent.

The company, part of struggling state conglomerate Dubai World, reported first-half earnings of $219.2 million, up from $187.7 million during the same period a year earlier. Earnings from continuing businesses were $206.5 million.

DP World benefited from a 7 percent increase in cargo volume at marine terminals it owns or has operational control of -- a sign that shipping container traffic is starting to rise following a severe slump caused by the global economic downturn.

It expects business to improve further in the second half of the year, reflecting higher seasonal demand, such as companies stocking up on holiday inventories. But executives cautioned that it is too early to say whether the rebound can last.

"It is tough to call. There is still uncertainty. To firmly commit that these kind of growth rates will be sustainable, it's premature at this stage," Chief Financial Officer Yuvraj Narayan told reporters.

DP World opened a new port in Callao, Peru, earlier this year, and plans to inaugurate two new projects in India and Pakistan later in 2010.

Cargo volumes rose more sharply at DP World's existing terminals, where business was up 10 percent, Narayan said.

The increased trade helped drive revenue 5 percent higher to $1.46 billion.
DP World is one of the more profitable arms of indebted state conglomerate Dubai World. It is excluded from its struggling parent's $23.5 billion debt restructuring effort.

The port company has operations at 50 marine terminals on six continents, including the Middle East's busiest port in Dubai.

It owns or has operational control of 28 of those — known as consolidated terminals. That is where it saw volumes rise 7 percent to the equivalent of 13.2 million standard 20-foot (6-meter) shipping containers.

The company last month said first-half business jumped 16 percent across all the 50 terminals where it has operations.

DP World in June delayed a months-old plan to list its shares on the London Stock Exchange. Its shares already trade on the Nasdaq Dubai, but the company has been disappointed with their performance there as the bourse struggles to attract interest from investors.

CEO Mohammed Sharaf said the company doesn't plan to pursue the secondary London listing until its full-year results are released early next year.

He declined to give a specific date but insisted the plan remains on track.

"The board has made the decision and they're committed to the decision," Sharaf said.

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Global port operator DP World posted higher first-half profits Wednesday, helped by a pickup in world trade that pushed cargo volumes at ports it controls up 7 percent. The company, part of struggling state conglomerate Dubai World, reported first-half earnings of $219.2...
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2010-00-18
Wednesday, 18 Aug 2010 04:00 PM
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