DP World profit up 67%

Global container terminal operator DP World on Thursday reported a “better than expected profit” of $751 million for 2011, up 67 per cent on 2010. The world’s third largest container terminal company said it benefited from the improvement in global container volumes while retaining a very clear focus on generating additional revenue, driving productivity and managing costs. The strong results come in the wake of the Dubai-based group’s announcement that it would pay off $3 billion of debt months before it becomes due by using existing cash resources. In a statement, the company said a growth in container volumes has resulted in Ebitda of $1.307 billion and an Ebitda (Earnings Before Interest, Taxes, Depreciation and Amortisation) margin ahead of expectations at a record 43.9 per cent. “When compared with the previous 2010 year, underlying  volume growth was nine per cent, with underlying revenue growth of 14 per cent and underlying Ebidta growth of 19 per cent.” The company said it profit attributable to the owners of the company, after separately disclosed items, was $683 million, “significantly ahead of the prior year as strong profit growth from operations was supplemented with a one-off gain from separately disclosed items including the profit on the monetisation of 75 per cent of our Australian terminals.” This resulted in earnings per share of 82 cents. In the Middle East, Europe and Africa region, Ebidta grew nine per cent to $861 million, with a margin of 45.7 per cent. In the Asia Pacific & Indian Subcontinent region, earnings increased 26 per cent to $322 million with a significantly improved margin of 64.5 per cent. The Americas and Australia region posted earnings of $203 million. “With strong conversion of profitability into cash, gross cash flow from operations increased to $1.159 billion with net debt reduced to $3.583 billion. This was partly as a result of our improved financial performance and partly due to the proceeds from the monetisation of 75 per cent of our Australian terminals,” the port operator said. The company said it continued to invest to ensure that DP World is well positioned to take advantage of the growth in global trade and meet the requirements of our customers. In 2011, the port operator completed and opened major capacity expansion projects in Dakar and Karachi and opened a new terminal at Vallarpadam (India). “Despite these new capacity additions, utilisation remains high, above 80 per cent across our portfolio. High utilisation in Jebel Ali is why we will be investing in an additional one million TEU of new capacity in 2012 and investing in a new four million TEU container terminal, which will be operational in 2014. In addition, we have announced that London Gateway will be operational in the final quarter of 2013.” DP World Group chairman, Sultan Ahmed bin Sulayem, said the profitability growth is a reflection of the company’s strategy of focussing on the faster growing emerging markets and more profitable origin and destination and gateway cargo. “This is also a reflection of our ability to meet our customers’ needs for the right capacity in the right locations and delivering a world class efficient service to ensure we are the port operator of choice around the world.” “On account of this strong improvement in underlying profit combined with the additional profit from the Australia monetisation, the Board of DP World is recommending an increased dividend distribution to $199 million, or 24 US cents per share. The board is confident of the company’s ability to continue to generate cash and support our future growth whilst maintaining a stable dividend payout,” said Sulayem. Mohammed Sharaf, DP World Group chief executive, said the improved performance was achieved despite a deteriorating global economic backdrop in the second half. “We have seen commendable growth throughout our global portfolio and our flagship terminal Jebel Ali continues to deliver sustainable EBITDA growth. We have supplemented this solid domestic performance with stronger growth in major terminals outside the UAE as we continue to invest in our portfolio of growth oriented terminals.” He said although the global macroeconomic uncertainty has continued into 2012, DP World continue to see growth across its portfolio in the first two months of the year, with an 11 per cent improvement in gross volume growth.