DP WORLD earnings grow by 27% in First Half of 2019

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DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem credited the company’s strategy of developing innovative new products and services and prudent management for DP World’s impressive half-year results. Bin Sulayem added that DP World’s excellent performance against the backdrop of challenging global economic conditions is a testament to the company’s resilience, sound growth strategy and the diversification of its global investment portfolio across energy, maritime and sustainable mobility amongst others. The statement was made as global trade enabler DP World PLC announced strong financial results today for the six months ending 30 June 2019 with reported adjusted EBITDA and attributable earnings growth of 21.9% and 26.8% respectively.

“Our half-year financial results have been in line with our expectations, Mr Bin Sulayem said. He highlighted that DP World continues to be guided by deep market understanding, innovation and operational excellence across 45 countries worldwide. Despite uncertainty from the trade war and challenging regional geopolitical realities, DP World has been able to deliver and excel a broadly impressive performance in the first half of 2019.

Results Highlights

  • Revenue of $3,463 million (Revenue growth of 31.9% on reported and 10.8% on a like-for-like basis)
    • Revenue growth of 31.9% supported by acquisitions and growth in non-containerized revenue.
    • Like-for-like revenue increased by 10.8% driven by growth in non-container revenue.
    • Adjusted EBITDA of $1,611 million and adjusted EBITDA margin of 46.5%
      • Adjusted EBITDA grew 21.9%, and EBITDA margin for the half-year stood at 46.5%. Like-for-like adjusted EBITDA increased by 9.9% with a margin of 51.4%.
      • EBITDA margin declined due to a change in the mix with the consolidation of lower margin Logistics and Maritime services businesses.


  • Profit for the period attributable to owners of the Company increased by 26.8% to $753 million
    • Profit attributable to owners of the Company before separately disclosed items rose 26.8% on a reported basis and grew 22.2% on a like-for-like basis.
    • Strong Cash Generation and Robust Balance Sheet
      • Cash from operating activities remains strong at $1,046 million in 1H2019.
      • Leverage (Net debt to annualised adjusted EBITDA) increased to 3.0 times (Pre-IFRS16) from 2.8 times at FY2018. On a post-IFRS16 basis, net leverage stands at 3.7 times.
      • DP World credit rating was kept at BBB+ by Fitch with a stable outlook citing the resilient and diversified nature of the portfolio.


  • Bond Transaction Executed at Record Levels
    • Raised $1.3bn through the issuance of long-term bonds at record low rates.
    • Further strengthens the balance sheet and offers financial flexibility.


  • Continued Investment Across the Portfolio
    • Ports & Terminals investments include two new assets in Chile, Fraser Surrey Docks8 (Canada) and consolidation of assets in Australia.
    • Logistics & Maritime investment include acquisition of Pan-European logistics platform of P&O Ferries and marine logistics operator, Topaz Marine & Energy8.
    • Capital expenditure of $636 million invested across the existing portfolio during the first half of the year.
    • Capital expenditure guidance for 2019 remains unchanged at up to $1.4 billion with investments planned into UAE, Posorja (Ecuador), Berbera (Somaliland), Sokhna (Egypt) and London Gateway (UK).
    • Posorja8, the only deep-water port in Ecuador with a capacity of 750k TEU opened on time and budget.


  • Acquisitions performing in line with expectations and logistics solutions offering now established
    • Unifeeder is delivering in line with expectations and continuing to benefit from structural changes in the market.
    • DP World now a significant operator of inland logistics in India, offering end-to-end solutions.


  • Global trade continues to grow, but the outlook is uncertain
    • The container trade grew by low single digits in the first half of 2019, but concerns around the trade war continue to weigh on the outlook.
    • We continue to focus on delivering operational excellence and maintaining our disciplined approach to investment to ensure we remain the trade partner of choice.


DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, added: “DP World is pleased to report like-for-like earnings growth of 22% in the first half of 2019 and attributable earnings of $753 million. This strong financial performance has been delivered in an uncertain trade environment, once again highlighting the strength of our portfolio.

We have continued to make progress on our strategy to become a trade enabler and solutions provider as we look to participate across a wider part of the supply chain. We have invested significantly across our Ports, Logistics & Maritime Services businesses. The aim is to connect directly with customers to offer logistics solutions and remove inefficiencies in the supply chain to accelerate trade. We are seeing positive signs of progress in our new businesses that give us encouragement for the future.

“Our balance sheet remains strong, and we continue to generate high levels of cash flow, which gives us the ability to invest in the future growth of our current portfolio. Going forward, we aim to integrate our new acquisitions and deliver synergies with the objective of providing smart end-to-end solutions, which will improve the quality of our earnings and drive returns.

“While the near-term trade outlook remains uncertain with global trade disputes and regional geopolitics causing uncertainty to the container market, the strong financial performance of the first six months also leaves us well placed to deliver full-year results slightly ahead of market expectations.”

Forward-Looking Statements

This document contains certain “forward-looking” statements reflecting, among other things, current views on our markets, activities and prospects. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur and which may be beyond DP World’s ability to control or predict (such as changing political, economic or market circumstances). Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of DP World speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Except to the extent required by law, DP World does not undertake to update or revise forward-looking statements to reflect any changes in DP World’s expectations with regard thereto or any changes in the information, events, conditions or circumstances on which any such statement is based.

Group Chairman and CEO Statement

2019 – Resilience Despite Trade Dispute

The trade dispute between China and the US 2019 has dominated 2019, and while this has caused uncertainty, it is a positive sign that container volumes are still expected to grow, albeit in low-single digits. Furthermore, the outlook for the container market appears robust as Drewry expects a growth rate of approximately 4% over the coming years with container capacity growth of 2%. This suggests the supply-demand dynamics of the industry will remain favourable with relatively high utilisation.

DP World’s container volume growth in the 1H2019 was broadly stable as robust growth in Asia Pacific, Indian Subcontinent, and Africa were offset by weaker volumes in the UAE and Australia. However, our ports and terminals profitability remained strong, and it is worth noting that despite weaker volumes at Jebel Ali, our like-for-like container revenues in the Europe Middle East and Africa region increased year-on-year as we focused on higher-margin cargo, once again highlighting the strength of the portfolio.

We continued to make a significant investment into our Ports and Terminals business as we acquired two modern terminals in Chile, allowing us to serve our customers in five key gateway locations in the west coast of South America. More recently, we opened our terminal in Posorja8 (Ecuador), delivered on time and budget. Customer interest in the only deep-water port in Ecuador is positive, and we are excited about the long-term prospects for this business. In Canada, we consolidated our position in Vancouver with our acquisition of Fraser Surrey Docks (FSD)8. Our customers in Vancouver require additional facilities for non-container activities, and we believe FSD can offer this much-needed capacity.

In Australia, we consolidated our position by acquiring an additional 35% stake at an attractive valuation to take our ownership to 60%. We believe the new ownership structure is optimal for its long-term growth prospects.

Smart Solutions-Driven Trade Enabler

In 2019, we continued to make progress in our logistics solutions strategy to enable trade as we announced acquisitions, including P&O Ferries (UK) and KRIL (India).

In Europe, our strategy is to provide efficient connectivity to and from hubs to end markets. P&O Ferries and Ferrymasters, which offer pan-European Ro-Ro (Roll-on Roll-off) short-sea and landside connectivity, will complement Unifeeder, which provides Lo-Lo (lift-on lift-off) short-sea connectivity. The assets are highly complementary and combined with our significant port assets, represent a compelling offer to end-cargo owners.

The early signs from Unifeeder are positive as the business continues to benefit from structural changes in the market and performs in line with our expectations. Unifeeder delivers efficient service and benefits from greater feeder outsourcing. Longer-term, we expect the short sea business to gain market share due to its ability to deliver a more sustainable product. We aim to scale Unifeeder and potentially replicate the model in new markets. Furthermore, we will begin to deliver potential revenue synergies with P&O Ferries, now that the transaction has closed.

In India, we have added KRIL, which is a sizeable rail logistics operator. Combined with our earlier acquisition of Continental Warehousing Corporation (CWC), a leading integrated multimodal logistics provider, it makes DP World a significant operator of inland logistics and container terminals in a fast-growing sizeable market. Our team has started gaining traction with end customers with an objective of delivering a solution to cross-selling our capabilities. The market remains fragmented, but we believe we have the right scale and product to deliver a compelling solution to our customers. The next stage of our logistics solutions evolution is to deliver a digital overlay on our services and we continue to make progress on this front.

Adding Scale to P&O Maritime Services

We recently announced the acquisition of Topaz Marine and Energy, a marine logistics solutions provider, for $1.08 billion. This acquisition adds scale to P&O Maritime services, a business which has delivered steady and growing EBITDA in recent years. Similarly, Topaz has long-term contracts with strong revenue visibility, and we expect it to deliver consistent earnings in the coming years.

Importantly, Topaz brings strong relationships with major oil companies that we aim to leverage, as well as a strong presence in the Caspian Sea, which is strategically vital for the Belt and Road initiative. We aim to develop trade in a market that will be a gateway connecting Europe to Asia.

Dubai Drydocks continues to deliver a steady performance despite challenging market conditions. We remain focused on servicing our customers while seeking new growth opportunities.

Our focus in the near term is to integrate the new acquisitions and explore revenue synergies to drive earnings growth. Financial discipline has served us well over the years, and it remains a priority to manage the growth opportunities while retaining a strong balance sheet. A portfolio focused on high-value cargo, and faster-growing markets have delivered consistent financial performance. We aim to retain the configuration of our portfolio that has a 70% exposure to origin and destination cargo and 75% exposure to faster-growing markets.

Group Chief Financial Officer’s Review

DP World delivered a strong set of financial results in 1H2019 and continued solid cash generation with profit attributable to owners of the Company at $753 million, up 27% year on year. Our adjusted EBITDA increased by 22% year-on-year to $1,611 million, while our adjusted EBITDA margin was diluted to 46.5% due to a change in mix effect as lower-margin businesses have now been consolidated into our portfolio. We expect this trend to continue as we add lower-margin logistics businesses. Reported revenue grew by 31.9% to $3,463 million, aided by acquisitions and growth in non-container revenue.

While it has been a busy year for investment, we continue to focus on maintaining a strong balance sheet. Post the half-year, we successfully executed a bond and Sukuk transaction and raised $1.3bn of new long-term finances at unprecedented rates as we took advantage of attractive market conditions. Furthermore, Fitch recently maintained our rating at BBB+ rating with stable outlook despite the challenging macro trade environment, citing diversified portfolio and ability to deliver stable cash flows.

Our leverage (Adjusted net debt to adjusted EBITDA) at 3.03x on a pre-IFRS16 basis remains well within the range of our guidance (ceiling of approximately 4x). Overall, the balance sheet remains strong with robust and consistent cash generation, and our partnerships with Caisse de dépôt et placement du Québec (CDPQ) and the National Investment and Infrastructure Fund (NIIF) of India give us further financial flexibility.

Middle East, Europe and Africa

Results before separately disclosed items



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Market conditions in the Middle East, Europe and Africa (EMEA) region, excluding UAE, remained steady with growth driven by London Gateway (UK), Southampton (UK) and Sokhna (Egypt). Performance in the UAE was soft due to the loss of lower-margin cargo.

Overall, revenue in the region grew 30.3% to $2,508 million on a reported basis, benefitting from the acquisition of Unifeeder and Mina Rashid transaction with Emaar Properties. Adjusted EBITDA was $1,362 million, up 36.5% driven by 71.2% growth in non-container revenues.

We invested $374 million in the region, mainly focused on capacity expansions in UAE, Sokhna (Egypt) and London Gateway (UK).

Asia Pacific and Indian Subcontinent

Results before separately disclosed items



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Markets conditions in the Asia Pacific and Indian Subcontinent region were generally positive despite the trade war concerns. Growth in both Asia Pacific and Indian Subcontinent have been strong with like-for-like containerised revenues growing 7.6%. Reported revenue growth of 20.8% was aided by the acquisition of CWC in India. Share of profit from equity-accounted investees grew 15.5% on a like-for-like basis, mainly due to strong growth in Manila (Philippines).

Adjusted EBITDA of $183 million declined by 19.2% due to the non-recurrence of the release of one-off provision, which boosted 2018 EBITDA.

Capital expenditure in this region during the year was $20 million, mainly focused on Pusan (South Korea).

Australia and the Americas

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Market conditions in the Australia and Americas region were mixed. In the Americas, robust volume growth in Prince Rupert (Canada) and Callao (Peru) was offset by weakness in Buenos Aires (Argentina). Volumes in Australia have been weak due to challenging market conditions. Overall, the reported strong volume growth is due to the acquisitions of terminals in Chile, Peru and consolidation of Australia.

Revenues rose 46.1% to $629 million and adjusted EBITDA increased by 13.1% to $188 million due to acquisitions and consolidation of Australia. On a like-for-like basis, adjusted EBITDA decreased by 21.6% due to weaker volumes in the Americas.

Profit from equity-accounted investees of $10 million was driven by the consolidation of Australia. We invested $217 million capital expenditure in this region mainly focused in Posorja (Ecuador).

Cash Flow and Balance Sheet

The 2019 accounts are impacted by the adoption of IFRS 16. For example, adjusted gross debt has risen by $3.1billion since the year-end to $13.5 billion, with lease liabilities accounting for $2.4 billion of the increase. The balance of the increase is mainly due to debt acquired with acquisitions. Cash on balance sheet stood at $2.0 billion resulting in net debt of $11.5bn. Our net leverage (adjusted net debt to annualised adjusted EBITDA) stands at 3.7 times post IFRS16 and would be 3.0x on a pre-IFRS16 basis. Cash generation remained solid with cash from operations standing at $1,046 million in 1H2019.

Capital Expenditure

Consolidated capital expenditure in the first half of 2019 was $636 million, with maintenance capital expenditure of $90 million. We expect the full year 2019 capital expenditure to remain unchanged at up to $1.4 billion to be invested in UAE, Posorja (Ecuador), Berbera (Somaliland), Sokhna (Egypt) and London Gateway (UK).

Net finance costs before separately disclosed items

Net finance cost for the six months was higher than the prior period at $318 million (1H2018: $229 million) mainly due to higher debt and the impact of IFRS16.


DP World is not subject to income tax on its UAE operations. The tax expense relates to the tax payable on the profit earned by overseas subsidiaries, as adjusted in accordance with the taxation laws and regulations of the countries in which they operate. For the first six months 2019, DP World’s income tax expense before separately disclosed items was $88 million (1H2018: $106 million).

Profit attributable to non-controlling interests (minority interest)

Profit attributable to non-controlling interests (minority interest) before separately disclosed items was $0.8 million against 1H2018 of $35.0 million due to discontinuation of our operations in Djibouti and consolidation of Australia assets.

Separately disclosed items

DP World reported a loss in separately disclosed items of $73 million, mainly explained by the expiration of concession in Surabaya (Indonesia) and consolidation of Australia assets.

Earnings per share (EPS)

As at 30 June 2019, basic EPS before separately disclosed items was 90.7 US cents, representing a 26.8% increase year-on-year.


It is our current dividend policy that not less than 20% of our profit for the year attributable to owners of the Company (after separately disclosed items) will be distributed as dividends.

Dividends in respect of the full year 2019 will be proposed at the time of the preliminary results in March 2020.

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