DP world earnings grow by 27% in the first half of 2019

By Rajive Singh

DUBAI 23 August 2019: DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem credited the company’s strategy of developing innovative new products and services and prudent management for DP World’s impressive half-year results. Bin Sulayem added that DP World’s excellent performance against the backdrop of challenging global economic conditions is a testament to the company’s resilience, sound growth strategy and the diversification of its global investment portfolio across energy, maritime and sustainable mobility amongst others.

The statement was made as global trade enabler DP World PLC announced strong financial results today for the six months ending 30 June 2019 with reported adjusted EBITDA and attributable earnings growth of 21.9% and 26.8% respectively.

“Our half-year financial results have been in line with our expectations, Mr Bin Sulayem said. He highlighted that DP World continues to be guided by deep market understanding, innovation and operational excellence across 45 countries worldwide. Despite uncertainty from the trade war and challenging regional geopolitical realities, DP World has been able to deliver and excel a broadly impressive performance in the first half of 2019.

Results Highlights

Revenue of $3,463 million (Revenue growth of 31.9% on reported and 10.8% on a like-for-like basis)

  • Revenue growth of 31.9% supported by acquisitions and growth in non-containerized revenue.
  • Like-for-like revenue increased by 10.8% driven by growth in non-container revenue.

Adjusted EBITDA of $1,611 million and adjusted EBITDA margin of 46.5%

  • Adjusted EBITDA grew 21.9%, and EBITDA margin for the half-year stood at 46.5%. Like-for-like adjusted EBITDA increased by 9.9% with a margin of 51.4%.
  • EBITDA margin declined due to a change in the mix with the consolidation of lower margin Logistics and Maritime services businesses

Profit for the period attributable to owners of the Company increased by 26.8% to $753 million

  • Profit attributable to owners of the Company before separately disclosed items rose 26.8% on a reported basis and grew 22.2% on a like-for-like basis.

Strong Cash Generation and Robust Balance Sheet

 

  • Cash from operating activities remains strong at $1,046 million in 1H2019.
  • Leverage (Net debt to annualised adjusted EBITDA) increased to 3.0 times (Pre-IFRS16) from 2.8 times at FY2018. On a post-IFRS16 basis, net leverage stands at 3.7 times.
  • DP World credit rating was kept at BBB+ by Fitch with a stable outlook citing the resilient and diversified nature of the portfolio.

Bond Transaction Executed at Record Levels

  • Raised $1.3bn through the issuance of long-term bonds at record low rates.
  • Further strengthens the balance sheet and offers financial flexibility.

Continued Investment Across the Portfolio

  • Ports & Terminals investments include two new assets in Chile, Fraser Surrey Docks8 (Canada) and consolidation of assets in Australia.
  • Logistics & Maritime investment include acquisition of Pan-European logistics platform of P&O Ferries and marine logistics operator, Topaz Marine & Energy8.
  • Capital expenditure of $636 million invested across the existing portfolio during the first half of the year.
  • Capital expenditure guidance for 2019 remains unchanged at up to $1.4 billion with investments planned into UAE, Posorja (Ecuador), Berbera (Somaliland), Sokhna (Egypt) and London Gateway (UK).
  • Posorja8, the only deep-water port in Ecuador with a capacity of 750k TEU opened on time and budget.
  • Acquisitions performing in line with expectations and logistics solutions offering now established
  • Unifeeder is delivering in line with expectations and continuing to benefit from structural changes in the market.
  • DP World now a significant operator of inland logistics in India, offering end-to-end solutions.
  • Global trade continues to grow, but the outlook is uncertain
    • The container trade grew by low single digits in the first half of 2019, but concerns around the trade war continue to weigh on the outlook.
    • We continue to focus on delivering operational excellence and maintaining our disciplined approach to investment to ensure we remain the trade partner of choice.
Dubai Gazette