DP World profit falls 60% amid Red Sea disruption

DP World

Dubai’s DP World said profit fell 60 percent in the first half of the year, as the global port operator felt the impact of the Red Sea disruption.

Profit attributable to owners fell to $265 million in the first six months from $651 million a year earlier.

However, revenues were up 3 percent to $9.3 billion from $9 billion a year ago. Revenue from the ports and terminals grew 15 percent year on year. Logistics reported a revenue decline of 2 percent to nearly $4 billion, while marine services revenue stood at $2 billion.

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Houthi rebels in Yemen began attacking commercial ships last November, in what they claim is a show of support for Palestinians in the Israel-Hamas war.

In May, Danish shipping major Maersk said that the Red Sea disruption is anticipated to lead to a 15 to 20 percent industry-wide capacity loss on the Asia to North Europe and Mediterranean routes in the second quarter of 2024.

Maersk said it will only return to sailing via the Red Sea/Gulf of Aden when the safety of seafarers, vessels, and cargo is guaranteed.

DP World said global container volumes increased by 6 percent, driven by strong growth in the Americas, Europe, Asia Pacific and Jebel Ali, the UAE.

In the first half, capital expenditures across the portfolio reached $994 million. Nearly $593 million was spent on ports and terminals, $278 million on logistics and parks and economic zones, and $122 million on marine services.

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The company expects to spend $2 billion in the UAE, including Drydocks World, London Gateway (the UK), Inland logistics (India), Dakar (Senegal), East Java (Indonesia), Callao (Peru), Jeddah (Saudi Arabia), Dar Es Salam (Tanzania), DP World Logistics (Africa) and Fraser Surrey Docks (Canada).

The Asia Pacific and India region reported robust performance, primarily driven by the growth of ports and terminals business. It benefitted from acquisition of Laem Chabang, Thailand and a new concession in Belawan, Indonesia.

Gross container volumes grew by 18 percent in the Americas.

DP World expects its gross global capacity to reach 102 million twenty-foot equivalent units (TEU) and a consolidated capacity of 67 million TEU by the end of the year.