Dubai: DP World, waiting on the outcome of a legal battle brought on by the government of east African country, Djibouti, continues to be confident on growing its business in Africa.
“We are in discussions throughout Africa,” Chairman Sultan Ahmad Bin Sulayem said at a conference on Thursday announcing the company’s 2014 financial results.
DP World, which saw profit rise 11.7 per cent to $675 million in 2014, is present in six countries across Africa, from Algeria to South Africa. The company is currently waiting on approval from the Senegalese government to build a free zone in the country, Bin Sulayem said. It already operates a port in the capital, Dakar.
Bin Sulayem said that DP World, one of the world’s largest port operators, is interested in building the free zone near the new airport, Blaise Diagne International which is about 70 kilometres from the capital. Last year, Bin Sulayem said at an Africa-focused conference in Dubai that DP World was looking to develop a free zone in Senegal without providing specific details on the plan.
Growth in sub-Saharan Africa is projected to pick up to 5.1 per cent by 2017, up from 4.5 per cent last year, according to the World Bank. Investments in infrastructure, rising production levels and a robust services sector are expected to drive growth.
But a court case brought on by the Djibouti government continues to frustrate DP World executives. “We’re not talking about Djibouti, we’re talking about the results today,” Bin Sulayem said when asked if DP World was looking to settle the case outside of the courts.
The Djibouti government alleges the Dubai firm used bribery to win a 30 year concession in 2006 to operate the Doraleh Container Terminal.
Mohammad Sharaf, DP World’s Group Chief Executive, who also declined to provide details of case, confirmed that DP World continues to operate the port.
DP World is also looking at new opportunities in Egypt, which held an investment conference in Sharm Al Shaikh last week in a bid to attract as much as $200 billion of foreign investment. A significant proportion has come from regional governments with the UAE most recently pledging at the conference $4 billion in aid. Kuwait and Saudi Arabia also each committed in Sharm Al Shaikh $4 billion to Egypt.
“As investors in Egypt, we are naturally vey interested in what we see coming. We are listening … we are evaluating, we are looking at the opportunities,” Bin Sulayem said.
DP World operates a port in Sokhna, which is along the Red Sea and about 120 kilometres from the Egyptian capital, Cairo. Earlier this week, Egyptian Minister of Transport, Hany Dhahy, reportedly announced DP World will build a $415 million liquid bulk storage terminal at the port.
DP World has access to $2.5 billion in facilities and $610 million in cash, Group Chief Financial Officer, Yuvraj Narayan, said. The company wants to maintain cash levels of between $500 million and $700 million each year going forward, he added. It spent around $2 billion in cash and used a $500 million facility to complete the $2.6 billion acquisition of Economic Zones World this week.
Collateral shares
A total of 20 per cent of DP World shares already used as collateral were “refinanced” last year under better terms, Narayan said. He added that the shares have been used as collateral since 2007.
