DP World earnings surge in 2016 despite ‘challenging’ market

The Dubai, United Arab Emirates-based port terminal operator posted a profit of $1.13 billion on $4.16 billion in revenues for the year, increases of 27.6 percent and 4.9 percent, respectively, from 2015.    DP World in 2016 grew profits attributable to owners of the company 27.6 percent to $1.13 billion million compared with the previous year, according to the company’s most recent financial statements.
   Earnings attributable to the owners of the company were up 6.2 percent on a like-for-like basis (not including divestments and new capacity).
   The Dubai, United Arab Emirates-based global port terminal operator posted earnings per share (EPS) of $1.36 for the full year compared with $1.06 per share the previous year. Revenues stood at $4.16 billion in 2016, an increase of 4.9 percent as reported and 1.3 percent on a like-for-like basis from 2015.
   Like-for-like earnings and revenue figures excluded contributions from DP World’s facilities in Yarimca, Turkey; Stuttgart, Germany; Antwerp Inland, Belgium; Prince Rupert, Canada; and Jebel Ali Free Zone, UAE.
   Container cargo volumes at DP World’s consolidated terminals – those it controls as defined under IFRS – grew 0.4 percent (down 1.6 percent on a like-for-like basis) to 29.2 million TEUs in 2016 despite what the company characterized as “challenging” markets.
   Total containerized revenue grew 3.8 percent (2.3 percent like-for-like), as containerized revenue per TEU grew 4.0 percent (3 percent like-for-like) compared with the previous year.
   Thanks to terminal expansion and acquisitions throughout 2016, the company grew its gross global capacity to 85 million TEUs per year, an increase of 15 million TEUs since 2012, and expects to surpass 100 million TEUs by 2020, subject to market demand.
   “We are pleased to announce another set of strong financial results for 2016, as we delivered earnings in excess of $1 billion and above 50 percent EBITDA margins for the full year for the first time,” DP World Group Chairman and CEO Sultan Ahmed Bin Sulayem said in a statement.
   “Encouragingly, our volumes have continued to grow ahead of the market with gross volumes growing 3.2 percent vs. Drewry full-year market estimate of 1.3 percent. Disciplined investment throughout the economic cycle has been one of the keys to delivering consistent growth, and in 2016, we invested $1,298 million across our portfolio in markets with strong demand and supply dynamics.
   Looking ahead to 2017, Sulayem said the company is expecting another “challenging year for global trade” despite an encouraging start. Even so, he projected volume growth at DP World will once again exceed the market average.
   DP World is anticipating capital expenditures of $1.2 billion in 2017, down slightly from 2016 levels, with investments planned at its Jebel Ali (UAE), Prince Rupert (Canada), Berbera (Somaliland), Dakar (Senegal) and London Gateway (U.K.) facilities.
   In addition, the company’s board of directors has recommended a 26.7 percent increase in dividend to $0.38 per share for the full year in 2016.
   “Our significant cash generation and investment partnerships leave us with a strong balance sheet and flexibility to capitalize on the significant growth opportunities in the industry,” added Sulayem. “Overall, we continue to believe that a portfolio which has a 70 percent exposure to origin and destination cargo and 75 percent exposure to faster growing markets will enable us to deliver enhanced shareholder value over the long term.”