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Dubai-based DP World reports 8.3% drop in full-year profits in 2019

Dubai-based DP World reports 8.3% drop in full-year profits in 2019

Annual revenue meanwhile rose by 36 per cent in 2019 to $7.68bn from $5.6bn in 2018

On Wednesday, DP World, the Dubai-headquartered global port operator and owner of the Jebel Ali Free Zone, reported an 8.3 per cent decline in full-year profit.

Profit attributable to owners after separately disclosed items dropped to $1.189bn in 2019, from $1.297bn in 2018.
Annual revenue meanwhile rose by 36 per cent on a reported basis to $7.68bn, compared to $5.6bn in 2018, driven mainly by acquisitions.

Read: Dubai’s DP World acquires Topaz Energy in $1bn deal

Those acquisitions included P&O Ferries in the UK, Topaz Energy & Marine in the UAE, and two terminals in Chile.

Capital expenditures reached $1.146bn in the year ending 2019, though capital expenditure for 2020 is pegged at $1.4bn with investments planned in UAE, Prince Rupert in Canada, London Gateway, Jeddah in Saudi Arabia, Callao in Peru, Sokhna in Egypt and Berbera in Somaliland.

It also reported a 30-year concession renewal at Jeddah Islamic Port, the largest port and hub connecting East-West cargo in Saudi Arabia.

In 2019, gross global capacity was at 91.8 million TEU. Consolidated capacity was reported at 54.2 million TEU.

Posorja, the only deep-water port in Ecuador, with a capacity of 750,000 TEU opened in October 2019 and was reported to be on-budget.

Commenting on the annual financial results, DP World Group chairman and CEO, Sultan Ahmed Bin Sulayem, said, “DP World is pleased to report like-for-like earnings growth of 5.4 per cent in 2019 and attributable earnings of $1,328m. Adjusted EBITDA grew 17.7 per cent to $3,306m with margins at 43 per cent on a reported basis and 49.6 per cent on a like-for-like basis.”
Regarding the uncertainty of outlook for global trade in 2020, Sulayem added, “The near-term outlook remains a cause for concern with global trade disputes, Covid-19 outbreak and regional geopolitics, causing disruption to trade.”

Read: DP World to delist from Nasdaq Dubai

The board of DP World recommended a dividend of $332m at 40 US cents per share, in line with its policy of maintaining a payout ratio of at least 20 per cent.

In February 2019, DP World stated that it was set to delist from Nasdaq Dubai and return to private ownership after parent company, Port and Free Zone World, offered to acquire DP World’s shares. “Following the planned delisting, the leverage on the balance sheet will rise temporarily but we are confident of de-leveraging as we remain committed to a strong investment-grade rating in the medium term. The business continued to generate high levels of cash flow and combined with more disciplined investment and potential capital recycling, we have enough flexibility to maintain a strong balance sheet,” said Sulayem

Read: Dubai’s Jebel Ali Free Zone slashes business licence fees by up to 70%

On Tuesday, DP World, the owner of the Jebel Ali Free Zone (Jafza) in Dubai, said that it has slashed its fees for new licence registrations and administration fees for businesses already operating in the free zone by 50-70 per cent.
The move will benefit existing businesses as well as those looking to set up operations within the free zone.
DP World, UAE Region currently contributes to over 33.4 per cent of Dubai’s GDP.

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