News / Middle East the star performer as DP World reports 'robust' H1

Photo: nickstrugnell

Robust Middle East, Europe and Africa (MENA) figures appear to have saved DP World’s first half, the terminal operator recording bumps in overall revenue and adjusted earnings.

MENA volumes climbed 1.9% for the six months to June, surpassing 12.6m teu, and bringing a 25.7% and 23.1% bounce in revenue ($6.5bn) and adjusted ebitda ($2bn), respectively, with the Middle East operations the star performer.

CFO Yuvraj Narayan said: “Our focus on revenue synergies continues to attract new customers, while cost optimisation projects have protected profitability. Performance of Ports and Terminal was steady, as a solid performance in Middle East and Africa compensated softer volumes in Europe.”

However, for other regional divisions, Asia Pacific & India and Australia & Americas, the financial picture was less promising, the latter recording declining volumes, revenues and earnings.

Consolidated throughput for Australia & Americas fell 3.3%, to just below 5.4m teu, leading to a marginal dip (-0.4%) in revenue and a 7.8% decline in adjusted ebitda, Mr Narayan citing softer US consumer confidence as a factor.

But he added: “In contrast, Australia has shown resilience amid these challenges and has maintained a more robust performance. Meanwhile, the logistics segment in these regions has exhibited steady performance.”

Asia-Pacific & India fared marginally better, as far as volumes go, recording a 0.8% uptick to a little over 5m teu, though this was not enough to keep the financials looking good. Revenue plummeted 16.9%, to $1.09bn, generating a 42.9% drop in adjusted ebitda, to $315m, although the terminal operator was expecting this on the back of the hit from lower freight rates.

“The unwinding of supply chain bottlenecks has resulted in the normalisation of ocean freight rates to pre-covid levels,” said Mr Narayan. But he said: “We anticipate more stability in future performance.”

He said the Ports and Terminals division “delivered a robust performance, with the focus on high-margin cargo continuing to drive growth in profitability”.

And overall, DP World was cautiously positive over its first half performance, with group revenue up 13.9%, to $9bn, leading to a 7% bounce in adjusted ebitda, which hit $2.6bn.

Group CEO Ahmed Bin Sulayem said he and the team were “pleased” with the “resilience” the numbers indicated, in the face of a softer box market that had led to weaker freight rates amid the wider economically challenging picture.

“Our focus on high-margin cargo, end-to-end bespoke supply chain solutions and cost optimisation has been crucial in securing these results,” he added. “This strategy has not only been effective during these challenging times, but also lays the foundation for our sustainable long-term growth and returns.”