DP World reports 2.4% growth in container volume

Tuesday, Jan 29, 2013

Dubai

Global port and container terminal operator DP World on Tuesday announced a 2.4 per cent increase in its annual container throughput to 56.1 million twenty-foot equivalent units (TEUs) across its global portfolio in 2012, over the prior year.

Adjusting for the divestment of four joint venture terminals during the year, like for like gross container volume growth was 3.7 per cent ahead of last year.

“This annual increase in gross container volumes was driven by a good performance from the Americas, Asia Pacific and Middle East regions where the focus on delivering improved efficiencies and productivity attracted more containers into our ports,” the Dubai-based DP World said in a statement released today.

Analysts say, the marginal growth a reflection of the growth in the overall global economy.

“The slow growth is a reflection of global economic developments. WTO had forecast global trade volume growth of 2.5% for 2012 in September citing the slowdown in economic activity in the Euro Area,” Dr Giyas Gokkent, Chief Economist of the National Bank of Abu Dhabi, told Gulf News. “The trade slowdown in the first half of 2012 was driven by deceleration in imports of developed countries which is consistent with demand compression in the Euro Area with the flipside of this being a corresponding weakness in the exports of developing economies.”

The UAE region continued to operate at very high levels of capacity utilisation, increasing the number of containers handed to 13.3 million TEUs for the year.

“During the year, the deteriorating macroeconomic environment and high levels of capacity utilisation, led us to change our short term strategy to focus more on high quality revenue generating business, and giving our customers the quality of service they are accustomed to with DP World,” Sultan Ahmed Bin Sulayem, DP World Chairman said.

The company, which is expanding its capacity in Jebel Ali port, had sold its Australian port assets last year.

DP World’s portfolio of consolidated terminals handled 27.1 million TEUs during 2012.

“Had the five terminals in Australia not been deconsolidated from 12 March 2011, the consolidated terminals would have delivered 0.9% growth ahead of the prior year. Like for like growth across the consolidated portfolio was 0.7 per cent,” DP World said.

The company is also investing in increasing capacity in Santos (Brazil) and London Gateway (UK), along with its home base in the UAE.

“After a strong start to the year we had a challenging second half. Our tight focus on cost management and higher quality revenue mean we still expect to achieve EBITDA in line with expectations for 2012. Lower net financing charges will benefit reported profit before tax,” Mohammed Sharaf, Group Chief Executive, commented.

Looking at this year, Dr. Gokkent expects slightly better volume growth in 2013. “WTO lowered its growth estimate for 2013 to 4.5% (from about 6% earlier), slightly better volume growth in 2013 than in 2012 given signs of improving outlook,” he said.

However, stiff competition with lower fees due to a glut in shipping market are a factor. “Port volume growth is expected to be modest as indicated by WTO forecasts,” Dr Gokkent said.

DP World operates over 60 terminals across six continents, with container handling generating around 80 per cent of its revenue. With a pipeline of expansion and development projects in key growth markets, including India, China and the Middle East, capacity is expected to rise to around 103 million TEU by 2020, in line with market demand.

About 80 per cent of the global trade is seaborne. Shipping lines’ annual contribution to global economy is about $400 billion annually.

By Saifur Rahman Business Editor