DP World’s preliminary results for 2009

- DP World has reported better than expected results reflecting management action and the continued investment in new terminals despite the challenging macroeconomic environment and the decline in global trade experienced in 2009.

Not only did the Group report a substantially smaller decline in gross volume of 8% against an expected industry decline of 12% but also profits in excess of US$300m. The focus on maintaining and generating incremental revenue, improving efficiencies and cutting costs across all container terminals has mitigated the impact of non-container revenue declines leaving DP World in a stronger position moving through 2010 and into 2011.

“2009 has been a challenging year with global container volumes falling almost 12% across the industry and a substantial decline in non-container cargo. In an industry such as ours, where the average terminal concession is for more than 25 years, we must continue to focus on, and invest for the longer term. The year presented management teams with an opportunity to review all our operations and drive through structural cost improvements and operational efficiencies. Tough decisions were taken, the results of which will ensure we are better placed to deliver profitable growth for the future,” said Sultan Ahmed Bin Sulayem, DP World chairman

Mohammed Sharaf, DP World’s CEO said, “In the first two months of 2010 we have seen 4% volume growth across our portfolio from a very low base last year and an improvement from the final quarter of 2009 as cost cutting initiatives continue to be realised. Although we are seeing positive signs of recovery, it is too early in 2010 to confirm sustainability as the macroeconomic environment and global trade patterns remain unpredictable. However, we are confident about the long term outlook for the container terminal industry and believe the challenges and our initiatives implemented in 2009 will position DP World in a far stronger position as we move into the future.”

According to the company, it remains committed to listing its shares on the London Stock Exchange and is focused on completing the process as soon as possible. Shareholders will be asked to approve amendments to the DP World Limited’s Articles of Association at the AGM on April 26, 2010 to facilitate the process.

During the year, DP World opened two new developments at Doraleh in Djibouti and Saigon in Vietnam, as well as completing the expansion of its flagship terminal in Jebel Ali, UAE. It was awarded new 30 year concession agreements in Algeria, for ports in Algiers and Djen-Djen, which began operating in the second quarter. Two more concessions were successfully renewed in Adelaide and Sydney, Australia for a further 30 and 15 years respectively.

Investment in new capacity also continued during the year. As well as the new terminals at Doraleh in Djibouti and Saigon in Vietnam, construction of Callao in Peru and Vallarpadam in India continued and both will open in 2010. A minority stake was also acquired in the development of the Brazilian Embraport multi-modal terminal in Santos, which is planned to become operational in 2012. And in January, the company announced that construction of essential infrastructure for the London Gateway (UK) terminal development was to begin.

(Source: Container Management)