DP World’s H1 revenue surges to $9.3b despite headwinds

Profit attributable to owners of the company was $265 million in the six months to June 30

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Containers at Jebel Ali port. DP World invested $994 million in capital expenditures during the first half of 2024. — FIle photo

Published: Thu 15 Aug 2024, 6:08 PM

Global ports giant DP World reported on Thursday 3.3 per cent revenue growth during the first half of 2024 to $9.34 billion, driven by its logistics, ports and terminals divisions, describing the performance “relatively resilient” despite challenging geopolitical and macroeconomic headwinds.

In a statement, DP World said it was confident of delivering an improved second-half adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) performance in 2024 and remains positive on the medium to long-term outlook for global trade and is focused on delivering integrated supply chain solutions to cargo owners to drive sustainable returns.

While consolidated container volumes increasing 3.7 per cent on a like-for-like basis to 25.033 million twenty-foot equivalent units (TEUs), attacks on Red Sea shipping and subsequent rerouting of ships had been a significant disruptor in the supply chain sector, and described its own Middle East, Africa and Europe operations as being “partially impacted”.

DP World’s overall profit attributable to owners of the company was $265 million in the six months to June 30, down from $651 million a year earlier, the port operator said. The company’s overall adjusted core profit fell by 4.3 per cent to $2.497 billion for the six months due to the crisis and investments to expand its logistics platform. DP World said it expects an improved performance for the second part of the year.

DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, said the year 2024 has been marked by a deteriorating geopolitical environment and disruptions to global supply chains due to the Red Sea crisis. “Nevertheless, our strategic emphasis on high-margin cargo, comprehensive end-to-end supply chain solutions, and stringent cost management have been crucial in achieving this financial performance.”

“In logistics, our investments have been focused on organically expanding our freight forwarding platform, which now encompasses over 90 per cent of global trade across more than 150 locations worldwide. Strategic investments in sectors poised for high growth allow us to provide value-added services, and we remain dedicated to continuously improving our logistics capabilities. This includes tackling supply chain inefficiencies and enhancing connectivity in key trade corridors to better support cargo owners,” said Sulayem.

“In summary, our balance sheet remains strong, and our operations continue to produce substantial cash flow. This financial strength provides the flexibility to further invest in our current portfolio’s growth and to seize new investment opportunities as they emerge. While the near-term trading outlook remains uncertain due to macroeconomic and geopolitical headwinds, the resilient financial performance of the first half and the positive momentum as we enter the second half, positions us well to deliver stable full year adjusted Ebitda,” he said.

DP World invested $994 million in capital expenditures during the first half of 2024, compared to $910 million in the same period last year. This investment was strategically allocated across the company’s portfolio, with $593 million directed towards Ports and Terminals, $278 million towards Logistics and Parks and Economic Zones, $122 million towards Marine Services, and $1 million towards Head Office.

The global ports operator has projected capital expenditures of approximately $2.0 billion for the full year 2024. This investment will focus on key projects in the UAE, including Drydocks World, as well as strategic expansions in London Gateway, Inland logistics (India), Dakar, East Java, Callao (Peru), Jeddah, Dar Es Salam, DP World Logistics (Africa), and Fraser Surrey Docks (Canada).