Challenging Macroenvironment Affects DP World’s Volumes
- Business & Finance
Dubai-based port operator DP World handled 17.5 million TEU across its global portfolio of container terminals in the first quarter of 2019, recording a decline of 0.6% year-on-year on a reported basis.
Gross like-for-like volumes declined by 0.7% in 1Q 2019 due to the higher year-on-year comparables and softer volumes in the United Arab Emirates (UAE) and Australia.
The UAE handled 3.5 million TEU in 1Q 2019, down 8.8% year-on-year, due to the challenging macroenvironment and loss of lower-margin cargo.
Growth in the Americas, Africa and Indian Subcontinent was robust with strong results in Callao (Peru), Sokhna (Egypt) and Mumbai (India).
At a consolidated level, DP World terminals handled 9.2 million TEU during the first quarter of 2019, a drop of 0.8% on a reported basis and down 3% year-on-year on a like-for-like basis.
Reported consolidated volume in the Americas and Australia region was boosted by the consolidation of Australia from March of 2019, according to the port operator.
“As previously flagged, we have seen softer volumes in 1Q2019 due to a strong prior year performance and general caution in some markets given the current uncertainty in the macro-environment,” Sultan Ahmed Bin Sulayem, Group Chairman and Chief Executive Officer, explained.
“In the UAE, the volume weakness is mainly due to loss of low-margin throughput, where our focus remains on profitable cargo and, while we expect the recent trends to continue into the second quarter, we do expect an improvement in the second half of the year.”
“On our wider portfolio, we have made good progress in strengthening our product… We continue to focus on delivering operational excellence, managing costs and disciplined investment,” Bin Sulayem concluded.