DP World says outlook concerning amid COVID-19 uncertainties
Dubai-based port and terminal operator DP World had a robust performance in the first quarter of the year with the like-for-like throughput broadly flat year-on-year.
The port operator handled 17.2 million TEU across its global portfolio of container terminals in the first quarter of 2020, with gross container volumes decreasing by 1.7% year-on-year on a reported basis and up 0.3% on a like-for-like basis.
Reported volumes declined in Asia Pacific and India Region due to the expiry of concession in Surabaya (Indonesia) and disposal in Tianjin (China).
Greater challenges lie ahead with the anticipated decline of global trade and volumes in the second quarter of the year and onwards, the port operator believes.
Hence, the economic impact of the pandemic is expected to felt to a greater extent in the coming quarter.
“Global trade and container volumes are forecast to decline in 2020 and the wide range of estimates by industry specialists (Drewry -3%, Sea-Intel -10%) further emphasizes the short-term uncertainty faced by our sector. Similarly, the timing of any recovery is uncertain with trade expected to pick up as and when global economic activity normalizes,” Group Chairman and Chief Executive Officer Sultan Ahmed Bin Sulayem commented.
“Given the more challenging environment, our near-term focus is on integrating our recent acquisitions to drive synergies, containing costs to protect profitability, managing growth capex to preserve cashflow and maintaining our investment grade rating.”
He added that the company’s investment in digital technology and automation has enabled it to minimize the disruption at its ports and remain operational.
Moving forward the outlook is a cause for concern due to numerous uncertainties. However, DP World’s CEO said the company remains positive on the long-term fundamentals of the industry.