DP World reports resilient H1 results amidst global challenges

Image: WAM

Ports operator and logistics giant DP World has reported a resilient financial performance for H1 2024 in the face of a challenging macroeconomic environment and geopolitical disruptions.

Revenue for the period ending June 30, increased by 3.3 per cent to $9.34bn, driven primarily by strong growth in its Ports and Terminals segment.

However, adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 4.3 per cent to $2.50bn, with the EBITDA margin narrowing to 26.8 per cent from 28.9 per cent in the same period last year.

The drop in EBITDA was attributed to disruptions in the Red Sea region and continued organic investment in expanding the group’s Logistics platform.

Profit for the period fell significantly by 35.6 per cent to $570m, while profit attributable to owners of the company plummeted by 59.3 per cent to $265m.

Revenue growth and key investments

DP World’s revenue growth was underpinned by a 6.1 per cent increase in like-for-like gross container volumes, with particularly strong performance in the Americas, Europe, Asia Pacific, and at Jebel Ali.

Capital expenditure during the period rose to $994m, up from $910m in H1 2023, with significant investments directed towards Ports and Terminals, Logistics, Parks and Economic Zones, and Marine Services.

The group’s investment strategy remains focused on key growth markets, with approximately $2bn earmarked for 2024. This includes projects in the UAE, UK, India, Senegal, Indonesia, Peru, Saudi Arabia, Tanzania, Africa and Canada.

Robust cash flow reported

Cash generated from operating activities remained robust at $2.09bn, slightly down from $2.13bn in the previous year.

DP World maintained a strong balance sheet with leverage on a pre-IFRS16 basis at 3.8 times net debt to adjusted EBITDA, compared to 3.7 times at the end of FY 2023.

On a post-IFRS16 basis, leverage stood at 4.2 times, up from 4 times in FY 2023.

The group remains committed to maintaining its net debt to EBITDA ratio below 4.0 times on a pre-IFRS16 basis to retain its strong investment-grade rating.

DP World to focus on sustainable growth

DP World continues to drive revenue synergies through its enhanced freight forwarding platform, which now covers over 90 per cent of global trade across 150 locations. The group’s logistics portfolio is well-positioned to capitalise on the growing demand for customised supply chain solutions, particularly in fast-growing markets and verticals.

Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World, commented, “We are pleased to report resilient results, with revenue increasing by 3.3 per cent in the first half of the year, despite challenging macroeconomic conditions. 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.”

Outlook for H2 2024

Looking ahead, DP World remains optimistic about H2 2024, expecting an improved EBITDA performance despite ongoing uncertainties.

The group’s strong cash flow and strategic investments in growth markets provide a solid foundation for sustainable returns.

While near-term challenges persist, DP World is confident in its ability to deliver stable full-year results and continues to focus on long-term value creation for its stakeholders.

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