DP World on Thursday said it recorded a 2.1 per cent drop in its net profit for the first half of the year, owing to deconsolidation of Doraleh (Djibouti) and consolidation of DP World Santos (Brazil).
The Dubai-based port operator’s net profit attributable to owners of the company for the period ending June 30, 2018 stood at $593 million.
The company’s revenue, meanwhile, grew 14.4 per cent in the first six months of the year, supported by the volume growth across all three regions and the impact of new acquisitions including Drydocks World LLC (Drydocks), Dubai Maritime City (DMC) and Cosmos Agencia Marítima (CAM), DP World said in a statement.
It further cautioned that geopolitical headwinds continued to pose risk for the logistics sector.
“However, the robust financial performance of the first six months also leaves us well placed for 2018 and we expect to see increased contributions from our recent investments in the second half of the year,” DP World group chairman and CEO Sultan Ahmad Bin Sulayem said in a statement.
For the first half of 2018, the company posted a revenue of $2.6 billion, with an adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) of $1.3 billion.
Cash from operating activities remained strong at $979 million in the first half of the year, DP World said, although it was slightly down on $1 billion for the same period last year.
The company is also marginally more leveraged now than it was at this time last year, with net debt to to annualised adjusted EBITDA increasing to 2.9 times from 2.6 times in 2017.
“Our balance sheet remains strong and we continue to generate high levels of cash flow, which gives us the ability to invest in the future growth of our current portfolio,” Bin Sulayem said, adding: “[We have] the flexibility to make new investments should the right opportunities arise.”
Going forward, the chief executive says he aims to integrate the company’s new acquisitions, and continue to “extend our core business into port-related, maritime, transportation and logistics sectors.”
On the forecast for trade, Bin Sulayem noted that “the near-term trade outlook remains uncertain with recent changes in trade policies and geopolitical headwinds in some regions continuing to pose uncertainty to the container market.”
Elsewhere, DP World was again upgraded by the rating agency Moody’s from Baa2 to Baa1, with a stable outlook following the one notch upgrade in 2016. Fitch Ratings also upgraded DP World from BBB to BBB+ in July 2017. Both rating agencies have upgraded DP World by two notches in two years.
According to the filing, capital expenditure guidance for 2018 remains unchanged at up to $1.4 billion, with investments planned into UAE, Posorja (Ecuador), Berbera (Somaliland), Sokhna (Egypt) and London Gateway (UK).