Dubai: Port operator DP World, a subsidiary of state-owned Dubai World, Wednesday announced that its full-year profit fell 46 per cent to $333 million (Dh1.2 billion) in 2009 from $621 million in 2008.
The decline, however, was less than expected as the company beat analyst expectations in an industry that has suffered a global decline in trade volumes.
The company's revenues fell 14 per cent to $2.8 billion (Dh10.3 billion) on the negative effects of pricing pressure and a volume decline of 8 per cent.
Last year the operator handled more than 43.4 million TEUs (twenty-foot equivalent container units) across its portfolio from the Americas to Asia.
The company, however, expects capacity to increase to around 95 million TEUs over the next ten years, riding on the back of expansion and development projects in key growth markets that include India, China and the Middle East.
The port operator performed better than the rest of the market as global gross volumes fell by almost 12 per cent and witnessed a substantial reduction in the volumes of non-container cargo.
"We are confident about the long-term outlook for the container terminal industry," chairman Sultan Ahmad Bin Sulayem said in a statement.
During the first two months of this year, the operator's growth stood at 4 per cent over the same period last year.
Encouraging signs
"So far, in 2010, we have seen good signals and we hope it stays that way," the operator's chief executive officer Mohammad Sharaf said at a press conference yesterday.
The company reduced fixed costs by 7 per cent last year, including 1,200 jobs, and aims to maintain a 3-4 per cent reduction of fixed costs.
In 2009, it started operations at two new developments, Doraleh in Djibouti and Saigon in Vietnam. It also completed the expansion of its terminal in Jebel Ali.
This year, it will bring further capacity as port construction of Callao in Peru and Vallarpadam in India nears completion.
The operator is currently working on the quay wall for the London Gateway (UK) terminal development.
DP World, whose shares trade on the Nasdaq Dubai market, said it would list on the London Stock Exchange as early as the second quarter of this year.
Whether more shares will be issued or not, company officials said the premium listing, set to be achieved through depository interest on the LSE, is to improve liquidity and not to raise more capital.
The board has recommended a full-year dividend of $0.82 per share from a total dividend payment of $136 million.
Parent company Dubai World is engaged in a $26 billion debt restructuring exercise, but DP World is not included in the process.
With a cash flow of $2.9 billion, the company said it would not need any major financing until the $3 billion revolving credit facility that is due in October 2012.