DP World’s H1 profit takes a massive hit

Dubai-based port and terminal operator DP World reported a profit attributable to owners of $313 million for the first half of 2020, a decrease of 58.5 % from the last year’s equivalent of $753 million.

Image by DP World

However, the company reported a revenue growth of 17.7 % on a reported basis having booked $4.07 billion in revenue for the period.

Like-for-like revenue decreased by 11.6% and down 3.4% excluding Emaar land sale in 2019.

DP World said the results were better than expected having in mind the relentless impact of COVID-19 on the world trade.

The Covid-19 outbreak has undoubtedly resulted in one of the most challenging periods in the history of our industry. Our gross volumes have declined by 3.9% in 1H2020 which compares favourably against an estimated industry decline of 10%. However, our like-for-like EBITDA6, excluding land sale in the prior period, has grown by 1.1% during this period which demonstrates that we have managed costs efficiently,” DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, said.

This outperformance once again demonstrates that we are in the right locations and a focus on origin and destination cargo will continue to deliver the right balance between growth and resilience.

Moving forward, DP World believes that the outlook remains uncertain, but trade is expected to recover when economies re-open.

“Overall, we are encouraged that our business has performed better than expected given the Covid-19 pandemic and, while the outlook is still uncertain, we remain positive on the medium to long-term fundamentals of the industry,” Bin Sulayem said.

During the period the company raised $1.5 billion through the issuance of the perpetual hybrid bond, which are used to pre-pay debt of Port and Free Zone World (PFZW), parent of DP World,  post half-year.

DP World said it was committed to a strong investment grade rating in the medium term.

The port operator’s capital expenditure stood at $552 million invested across the existing portfolio during the first half of the year.

Capital expenditure guidance for 2020 is for approximately $1.0 billion with investments planned into UAE, London Gateway (UK), Berbera (Somaliland), Sokhna (Egypt), and Caucedo (Dominican Republic).