Dubai: DP World, the Nasdaq Dubai-listed ports operator, reported on Thursday a 14.9 per cent increase in its profits for 2017, driven by higher revenues and an improved trading environment.
Profits for the year attributable to owners after separately disclosed items reached $1.18 billion (Dh4.3 billion), up from $1.02 billion in 2016, in line with market expectations. Revenues in 2017 jumped 13 per cent year-on-year to reach $4.7 billion.
In a statement posted to Nasdaq Dubai’s website, DP World said it expects to continue to grow ahead of the market in 2018 even as it described this year as a “challenging” one.
The board of DP World recommended increasing dividends by nearly 8 per cent to $340 million, which would amount to 41 US cents per share from 38 cents a share for 2016.
Sultan Bin Sulayem, DP World Group chairman and chief executive officer, said the company has made “an encouraging start to the year,” with current trading conditions in line with expectations.
“As we look ahead into 2018, geopolitical headwinds in some regions pose a challenge, but we expect to continue to grow ahead of the market and see increased contributions from our recent investments,” he said.
Bin Sulayem added that he expected DP World to benefit from improved macroeconomic growth globally, and that the business was well-positioned to grow in the medium and long terms.
The company is planning up to $1.4 billion in capital expenditure in 2018, with investments planned mainly into the UAE, Somaliland, Egypt, Ecuador, South Korea and Mozambique.
Share prices
In 2017, DP World’s capital expenditure reached $1.09 billion, below the group’s earlier guidance of around $1.2 billion for the year.
Despite the increase in profits, DP World’s share prices fell 3.67 per cent to end at $22.8 on Thursday on Nasdaq Dubai.
Sanat Sachar, senior associate at asset management at Al Mal Capital, said the stock has been under pressure, largely due to issues in Djibouti where the government abruptly ended the company’s contract to run a terminal there.
Sachar said he expected to see weakness in share prices till more clarity comes to the market.
“Global trade might face some headwinds due to trade wars talks. However, DP World should not be impacted much as they largely cater to emerging markets, and most of their developed market exposure is between booming Asian economies, Europe and Canada,” he said.
When asked about the impact of possible trade wars after the US announced it will implement tariffs on imports of steel and aluminium, Bin Sulayem declined to comment. He told reporters that trade was still growing and will continue to.
Commenting on the issue, Yuvraj Narayan, DP World Group chief financial officer, said that the company did not seen a decline in volumes even as protectionist policies gained momentum in the past couple of years.
