Dubai DP World Blames Tough Market As Annual Revenue Falls

Dubai-owned port operator DP World said domestic capacity constraints and tough market conditions were to blame after it reported declines in annual revenue and container volumes on Thursday.

The world’s fourth-largest port operator’s annual profit attributable to shareholders rose 10.9 per cent to $604 million in 2013. This compares with a profit of $545 million in 2012.

But once DP World included separately disclosed items the company’s annual profit actually fell 13.4 per cent to $640 million in 2013, from $738 million a year earlier.

DP World had disclosed items of $48 million, mostly relating to a $158 million profit on asset sales and a $99 million impairment of assets. It did not provide further details or comparable figures for the previous year.

DP World’s consolidated volumes fell 3.8 per cent to 26.1 million TEU – or twenty-foot equivalent container units – in 2013, down from 27.1 million a year earlier.

“Market conditions in the Asia Pacific and Indian Subcontinent region were challenging, particularly in the first half of 2013,” a company statement to the Nasdaq Dubai bourse said on Thursday.

“Weaker than expected GDP growth in Asia combined with a depreciating currency and divestments and monetisations impacted reported volumes.”

DP World’s annual revenue for 2013 was $3.07 billion, down 1.5 per cent on 2012.

“Market conditions in the Middle East, Europe and Africa region were mixed. Resilience in our UAE and Africa portfolio mitigated the weaker markets elsewhere,” the company said, adding it had faced capacity constraints at key locations including its home port of Jebel Ali.

The company set its 2013 ordinary dividend at 23 cents per share. This compares with 21 cents per share for 2012, according to the statement.