Dubai's DP World sails into robust revenue growth in H1-2022, with profit at $884m
High margin cargo and strong gains on feeder services help with super-charged growth
Dubai: The Dubai ports and terminals operator DP World has sailed into a 60.4 per cent revenue growth in H1-2022 to $7.93 billion. The growth was supported by a mix of acquisitions in key overseas markets and ‘strong’ performance from feeder services.
Plus, of course, there was significant gains from the high margin cargo operations, as global shipping and trade movements took on more stability after the Covid distractions of 2020-21.
DP World’s profit for the first-half was $884 million, and that’s up 51.2 per cent year-on-year. Profit attributable to shareholders is $721 million.
"We are delighted to report a record set of first-half results with adjusted EBITDA growing 34.6 per cent and attributable earnings rising 51.8 per cent," said Sultan Bin Sulayem, Chairman, and CEO. "This significant growth demonstrates that our strategy to focus on high margin cargo and to offer customized supply chain solutions will provide sustainable returns in the long term.
In its forecast, DP World says: "H1-2022 performance has been ahead of expectations but we expect growth rate to moderate in H2-2022 on more challenging economic environment."
'Fresh capital'
"In recent months, we announced several transactions to raise approximately $9 billion. This strengthening of the balance-sheet allowed us to achieve our 2022 leverage target of below 4x net debt to EBITDA, and this fresh capital also provides us with the flexibility to accelerate investment in key growth markets whilst maintaining an investment grade rating."
The short-term outlook is 'uncertain due to geopolitics, higher inflationary environment, currency fluctuations and continued supply chain disruptions'. But "DP World remains positive on medium to long-term outlook for global trade and is focused on delivering integrated supply chain solutions to cargo owners to drive growth and returns," the operator added.
According to Bin Sulayem, "Cargo owners continue to respond positively to our end-to-end product offering and we are focused on integrating our recent logistics acquisitions to further drive revenue synergies. We continue to invest in high growth verticals and markets to offer compelling supply chain solutions."
"By leveraging our best-in-class infrastructure across logistics, ports and terminals, economic zones, digital and marine services, DP World aims to lower inefficiencies and improve connectivity in key trade lanes."
Through this period, gross throughput handled was 39.48 million TEUs, a gain of 2.3 per cent, while within the Middle East, Europe and Africa port operations, the tally was 12.37 million TEUs, which is a 2 per cent gain.
- DP World's capital expenditure hit $741 million in H1-22 (against $687 million in 2021) and was invested across the existing portfolio.
- Capital expenditure guidance for full-year 2022 is for $1.4 billion, with investments planned at UAE operations, Jeddah, London Gateway, Sokhna (Egypt), Senegal and Callao (Peru).
"The near-term outlook remains uncertain due to the more challenging macro and geopolitical environment," said Bin Sulayem. "Consequently, we expect growth rates to moderate in the second half of 2022. Nevertheless, we remain positive on the medium to long-term fundamentals of the industry and DP Worlds ability to continue to deliver sustainable returns."
Stringing together partnerships
DP World had a busy first-half when it comes to expanding alliances across continents. These include:
- A $5 billion investment by Canada’s CDPQ, which values the three UAE assets at around $23 billion. “The second tranche of this transaction is expected to raise up to another $3 billion, which will further boost our balance-sheet,” the statement added.
- In India, the partnership with NIIF was broadened to include DP World’s flagship India ports platform, which will raise approximately $300 million. “We have made significant progress in building an inland logistics infrastructure network of great scale that complements our container ports platform,” the company said. “The opportunity landscape in India remains significant and this transaction will allow us to accelerate investment across ports and logistics to drive returns for our respective stakeholders.”
- A new investment platform with BII Group to ‘accelerate investment in Africa’ and unlock the trade potential of the continent. “By combining our in-depth knowledge of ports & logistics and BII’s expertise in infrastructure investments in Africa, we can drive greater supply chain efficiencies, provide improved trade connectivity and ultimately enhance value for all stakeholders.”
- In France, DP World raised about $300 million by exiting Le- Havre and consolidating Eurofos. “The Eurofos terminal is important to DP World’s long-term strategy as a leading Mediterranean port and we are excited to focus on unlocking the substantial growth prospects of Fos.”