DP World, the Dubai-based company that operates ports from Peru to China, said its cash flow levels will allow it to make new investments if they become available at the right prices, after posting an 18 percent increase in first-half net income.
Net profit attributable to shareholders after separately disclosed items in the six months to June 30 advanced to $642 million (Dh2.36 billion) year-on-year, DP World said in a statement to Nasdaq Dubai, where its shares are traded. Revenue increased three percent on a like-for-like basis to $2.63bn on throughput growth and acquisitions, it said. Gross volumes grew 4.8 percent to 35.6bn TEUs.
“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, and the flexibility to make new investments should the right opportunities arise,” Sultan Bin Sulayem, DP World group chairman, said.
The Dubai-based company, which operates 78 marine and inland terminals in 42 countries, has been on an acquisition spree this year. Last week it announced the purchase of Danish port-related logistics company Unifeeder for €660 million (Dh2.8 billion), the company’s first purchase of its kind, as it expands into shipping. Last month, DP World said it planned a logistics hub in Mali, ramping up its presence in Africa where it has ports in Senegal, Somaliland, Rwanda, Mozambique, Djibouti, and Algeria. DP World has announced recent acquisitions worth $1.4bn, the statement showed.
Capital expenditure guidance for 2018 remains unchanged at $1.4bn with investments planned in UAE, Posorja (Ecuador), Berbera (Somaliland), Sokhna (Egypt) and London Gateway (UK), the ports operator said. Capex in the first half of the year reached $439m.
DP World’s balance sheet “remains strong” with the leverage of 2.9 times and cash on the balance sheet of $1.51bn, that gives it ” flexibility to continue to seek growth opportunities in port and other related maritime markets, should they become available at attractive prices,” it said.
However, the company warned about market uncertainty despite an “upswing” in global trade in the first half of the year.
“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,” Sultan Bin Sulayem, DP World group chairman, said. “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.”
Global trade tensions are on the rise after US President Donald Trump adopted an increasingly protectionist stance that prompted retaliatory measures from China and other countries.
“Increased use of restrictive trade policy measures and the uncertainty they bring to businesses and consumers could produce cycles of retaliation that would weigh heavily on global trade and output,” the World Trade Organization said in an April 12 report. “Worsening geopolitical tensions could be counted on to reduce trade flows, although the magnitude of their impact is unpredictable.”
DP World said its first-half profit to shareholders before disclosed items dropped 2.1 percent to $593m year-on-year after deconsolidation of the Doraleh port in Djibouti and consolidation of its port in Santos, Brazil.
Credit ratings agency Moody’s upgraded DP World’s long-term issuer rating to Baa1 with a stable outlook in June.
Just last month DP World made another purchase, this time venturing into the European short sea market with the acquisition of Unifeeder and the full financial report can be viewed HERE or there is a short video giving basic details of results, recent acquisitions etc. HERE.