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DP World’s profits drop despite revenue rise

UAE non-oil foreign trade DP World
UAE trade with Turkey recorded one of the highest growth rates in the first half of 2023, rising 87.4% annually
  • CEO described ‘challenging economic conditions’
  • Port operator committed $910m in H1
  • UAE business carbon emissions cut by 47% 

Port operator DP World has reported a drop in profits for the first six months of the year by almost 10 percent, despite revenues increasing by 14 percent.

Profit attributable to the UAE multinational logistics group in H1 was down 9.7 percent at $651 million from the same period in 2022, when it posted a record surplus of $721 million.

DP World group chairman and CEO Sultan Ahmed bin Sulayem said they had faced a softer container market and weakened freight rates during what he described as “challenging economic conditions”.

He cautioned that the near-term trade outlook was “uncertain” due to macroeconomic and geopolitical factors, yet remained confident that the “solid financial performance of the first six months positions us well to deliver a steady set of full-year results”.

“We remain optimistic about the medium to long-term prospects of the industry and DP World’s capacity to consistently generate sustainable returns,” bin Sulayem said.

DP World’s adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) grew by 7 percent to $2.6 billion with adjusted Ebitda of 29 percent.

The operator’s consolidated volumes of TEUs (twenty-foot equivalent units) was up to just over 23 million.

DP World profitsDP World
DP World group chairman and CEO Sultan Ahmed bin Sulayem

DP World committed $910 million in capital expenditure from January through to June this year.

This was split between $412 million on its ports and terminals, $284 million on logistics and parks and economic zones, $187 million on marine services and $27 million on the company’s head office.

The company expects to have around 95 TEU of gross global capacity by the end of this year and 59.7 million TEU of consolidated capacity.

Supply chain advisors Drewry forecasts global container throughput will grow to 932 million TEU by 2025, up from 858 million TEU in 2021.

In May DP World completed a AED954 million ($260 million) expansion project, increasing container throughput by 60 percent at the Port of Vancouver.

It is set to commence operations at Indonesia’s 600,000 TEU Belawan New Container Terminal in North Sumatra by the end of the year, with plans to increase its capacity to 1.4 million TEUs.

In February DP World also won a concession to develop, operate and maintain the Tuna-Tekra mega-container terminal at Deendayal port on the western coast of India. 

“Our balance sheet remains robust, and we continue to generate high levels of cashflow, which provides us the flexibility to invest in the growth of our existing portfolio and new investment opportunities when they arise,” bin Sulayem said.

DP World recently invested in renewable energy through the I-REC (International Renewable Energy Certificate) programme, an accreditation body for standardised renewable energy schemes and sustainability claims, which has cut its UAE business carbon emissions by 47 percent. 

“We are confident of achieving our goal to cut CO2 emissions by 700,000 tonnes which accounts for approximately 22 percent of our total emission within the next five years,” bin Sulayem said.