Dubai’s DP World posts 18% surge

Dubai-based ports operator DP World today announced an 18 per cent increase in its profits for 2011, from $450 million in 2010 to $532 million last year. In a statement posted on Nasdaq Dubai bourse’s website, the global ports operator said it had delivered “a better than expected profit attributable to owners of the company before separately disclosed items of $459 million, 23 per cent ahead of last year.” “DP World delivered an excellent improvement in profitability during 2011 reporting profit for the year before separately disclosed items of $532 million,” said Sultan Ahmed bin Sulayem, DP World’s Group Chairman. “This improvement in profitability is a reflection of our strategy, which sees us focus 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 deliver a world class efficient service to ensure we are the port operator of choice around the world,” he added. DP World’s adjusted EBITDA for 2011 was $1,307 million, with adjusted EBITDA margin of 43.9 per cent. When compared with the prior year, the company said underlying adjusted EBITDA growth was 19 per cent, ahead of underlying revenue growth of 14 per cent and underlying container volume growth of 9 per cent. “We have delivered a sustainable improvement in underlying container revenue per TEU of 5 per cent, increased underlying non-container revenue by 11 per cent and delivered a reduction in our underlying cost per TEU following productivity improvements in parallel with our ongoing discipline around costs,” the statement said. “Since the decline in global container volumes in 2009, DP World has worked hard to build a more robust and profitable portfolio. We have also continued to invest in our business through the downturn. Our 2011 results reflect this, with a 55 per cent improvement in profit attributable to owners of the company before separately disclosed items since 2009, as our investments in new terminals mature and we benefit from the inherent operating leverage of our portfolio,” bin Sulayem said. “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,” he said. “2011 has been another good year for DP World with the second half of the year delivering a better performance than the first half. This improved performance was achieved despite a deteriorating global economic backdrop in the second half,” said Mohammed Sharaf, DP World’s Group CEO. “We have benefited from the improvement in global container volumes whilst retaining a very clear focus on generating additional revenue, driving productivity and upholding a disciplined approach to cost management. This has resulted in an adjusted EBITDA of $1,307 million and adjusted EBITDA margin ahead of expectations at a record 43.9 per cent,” he said. “We have seen commendable growth throughout our global portfolio and our flagship terminal Jebel Ali (UAE) 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,” Sharaf added. “The global macroeconomic uncertainty has continued into 2012.  With our portfolio focused on the faster growing emerging markets and more stable O&D markets, we continue to see growth across our portfolio in the first two months of the year, with an 11 per cent improvement in gross volume growth. We remain committed to delivering improved operational and financial performance over 2011,” he said. “As we look ahead, we remain confident about the long term outlook for our industry.  We believe our continued investment in existing and new terminals around the world will ensure our portfolio is best positioned to meet the expectations of our customers and should allow us to continue to outperform.” Each of our DP World’s grew in 2011 over the previous year. In the Middle East, Europe and Africa region, adjusted EBITDA grew 9 per cent to $861 million, with an adjusted EBITDA margin of 45.7 per cent. In the Asia Pacific and Indian Subcontinent region, adjusted EBITDA increased 26 per cent to $322 million with a significantly improved adjusted EBITDA margin of 64.5 per cent. The Americas and Australia region delivered adjusted EBITDA of $203 million or, excluding the deconsolidation of the five Australia terminals, on an underlying basis, delivered adjusted EBITDA growth of 37 per cent and improved adjusted EBITDA margins of 33.1 per cent, the company said in the statement. Profit attributable to owners of the company after separately disclosed items was $683 million. This delivered earnings per share (EPS) of 82 cents, considerably ahead of the prior year EPS of 45 cents, due to separately disclosed items increasing profit by $225 million. “With strong conversion of profitability into cash, gross cash flow from operations increased to $1,159 million with net debt reduced to $3,583 million. 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. This results in leverage (net debt to adjusted EBITDA) of 2.7 times and provides a solid platform for investing in the future growth of our operations. “We continue to invest in our operations to ensure that DP World is well positioned to take advantage of the growth in global trade and meet the requirements of our customers. During 2011 we completed and opened major capacity expansion projects in Dakar (Senegal) and Karachi (Pakistan) and opened a new terminal at Vallarpadam (India).  Despite these new capacity additions, utilisation remains high, above 80% across our portfolio. High utilisation in Jebel Ali (UAE) is why we will be investing in an additional 1 million TEU of new capacity in 2012 and investing in a new 4 million TEU container terminal which will be operational in 2014.  In addition, we have announced that London Gateway (UK) will be operational in the final quarter of 2013.”