. For best results when printing this announcement, please click on the link below:http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130320:nRST3971Aa RNS Number : 3971ADP World Limited20 March 2013 DP WORLD LIMITED ANNOUNCES STRONG FINANCIAL RESULTS For the year ended 31 December 2012 Dubai, United Arab Emirates, 20 March, 2013: Global marine terminal operator DP World today announces strong financialresults from its global portfolio of marine terminals for the twelve months to 31 December 2012, delivering profitattributable to owners of the Company before separately disclosed items of $555 million, 21% ahead of last year. Financial results before separately disclosed items unless stated1 USD million (unless stated) 2012 2011 % change Gross throughput2 (TEU '000) 56,076 54,737 2% Consolidated throughput3 (TEU '000) 27,097 27,471 (1%) Revenue 3,121 2,978 5% Adjusted EBITDA4 1,407 1,307 8% Adjusted EBITDA margin 45.1% 43.9% - Profit for the year attributable to owners of the Company 555 459 21% Profit for the year attributable to owners of the Company after separately disclosed items 749 683 10% Earnings per Share (US cents) after separately disclosed item 90 cents 82 cents 10% Ordinary dividend per shareSpecial dividend per shareTotal dividend per share (US cents) 21 cents3 cents24 cents 19 cents5 cents24 cents 10%(36%)0% Our results reflect a very strong performance from those terminals which were operational within our portfolio for theduration of the year. Year over year growth was impacted by the monetisation of assets from the Australia, Europe andMiddle East region. Excluding all these changes in our portfolio, revenue growth would have been 8% and adjusted EBITDAgrowth would have been 11%. ? Revenue of $3,121 million Container revenue increased 2.4% driven by a 4% increase in container revenue per TEU in spite of the 1% decline incontainer volumes Non-container revenue increased 14% ? Adjusted EBITDA of $1,407 million; adjusted EBITDA margin of 45.1% A focus on higher revenue, higher margin business improved adjusted EBITDA margin ? Profit for the year attributable to owners of the Company5 of $555 million Strong adjusted EBITDA growth and lower net debt delivered 21% increase in profit ? Active management of portfolio to recycle capital into faster growing strategic markets Realised $249 million profit from monetisation of assets during the year which helped drive profit attributable toowners of the Company after separately disclosed items of $749 million ? Strong cash generation and balance sheet remains robust Net cash from operating activities increased to $1,231 million Leverage (Net Debt to adjusted EBITDA) reduced to 2.0 times The Hong Kong transactions, announced on 7 March 2013, will further reduce our leverage ? Continued investment in quality long-term assets to drive long-term profitable growth $685 million invested across the portfolio in 2012 Key developments at Jebel Ali (UAE), Embraport (Brazil) and London Gateway (UK) remain on track to open later this yearas scheduled ? Earnings per share, after separately disclosed items, increased 10% to US 90 cents ? Total dividend per share of 24 US cents Ordinary dividend of 21 US cents per share, 10% ahead of the prior year Special dividend of 3 US cents per share DP World Chairman, Sultan Ahmed Bin Sulayem commented; "DP World delivered increased profit for the year of $749 million6 following a strong year of operational performancefrom its global operations, prudent financial management and proactive management of assets, whilst continuing to invest inthe future growth of the Company. "Delivering an improvement in profits during what has been a challenging operating environment shows that our portfolio isfocused on the right markets, and on delivering the right operations and service to our customers. "This year, we have continued to actively manage our portfolio to maximum advantage, divesting non-core or low returnassets, and repaying debt. This has enabled us to move capital into those markets where we see more profitable returnswhilst significantly reducing our leverage and strengthening our capital base. "We are in the midst of a large investment programme that ends in 2014. During this time, not only will we deliver another10 million TEU of capacity across our global portfolio helping to drive profitable growth, but our cash generation willcontinue to grow strongly. "It is our actions today, whether investing for growth, actively managing our portfolio of assets or strengthening ourbalance sheet that will allow us to deliver higher returns for our shareholders over the medium term. "Reflecting this strong performance, combined with the realisation of profit from the monetisation of assets during theyear, the Board of DP World is recommending total dividend of $199 million, or 24 US cents per share. This comprises a 10%increase in the ordinary dividend to 21 cents paid with a special dividend of 3 cents. The Board is confident of theCompany's ability to continue to generate cash and support our future growth whilst maintaining a consistent dividendpayout." DP World Group Chief Executive, Mohammed Sharaf commented; "In 2012 we have focused on our existing operations through the delivery of exceptional customer service from improvedefficiencies in our terminals. This has allowed us to deliver good revenue growth and manage costs, resulting in asignificant improvement in adjusted EBITDA margin to 45.1%. "Whilst the operating environment has remained challenging in some of our regions, it is the strength of our operations inAfrica, Middle East, South America and Asia which has supported our improvement in adjusted EBITDA to $1,407 million. "Last year was also an important period in terms of progressing the delivery of four major development projects around theworld. The first of these will come on stream in the next few months at Jebel Ali (UAE), with Embraport (Brazil) andLondon Gateway (UK) opening later this year. The fourth, the new terminal at Jebel Ali, is well underway and set to opennext year. "Operating conditions in each of our markets in the first two months of 2013 have been consistent with those experienced atthe end of last year and the economic environment continues to remain uncertain. "We remain confident about the long term outlook of our industry and remain well positioned to deal with a changingeconomic environment as well as continue to focus on our established high standards of service to customers." - END - The Chairman's Statement, Operating and Financial Review and Financial Statements follow from page 5. Investor InquiriesFiona Piper Jasmine Lindsay DP World Limited DP World Limited Dubai Mobile: +971561778731 Direct: +97148080812 UK Mobile: +447919175602 Mobile: +971504220405 Email: Fiona.piper@dpworld.com Email: jasmine.lindsay@dpworld.com 12 Noon Conference Call and Analyst / Investor Meeting in Dubai, UAE 1) Meeting for analysts and investors hosted by CEO Mohammed Sharaf and CFO Yuvraj Narayan in Dubai, UAE at 1200 noon onWednesday 20 March at DIFC Conference Centre, The Gate Building 4. Those unable to attend in person can join the meeting byconference call (0900 London). 2) An additional conference Call will be hosted at 1600Dubai time (1200 London, 0800 New York) on Wednesday 20 March2013. 3) A playback of the call will be available shortly after the 12 noon conference call concludes. For the dial in detailsand playback details please contact investor.relations@dpworld.com. The presentation accompanying these conference calls will be available on DP World's website within the investor centre.www.dpworld.com from 0900 UAE time this morning. 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 tofuture 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 anyoutcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or onbehalf 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 bylaw, DP World does not undertake to update or revise forward-looking statements to reflect any changes in DP World'sexpectations with regard thereto or any changes in information, events, conditions or circumstances on which any suchstatement is based. Chairman's Statement Delivering an improvement in profits during what has been a challenging operating environment shows that our portfolio isfocused on the right markets, and on delivering the right operations and service to our customers. This year, we have continued to actively manage our portfolio, managing our assets to maximum advantage, divesting non-coreor low return assets, and repaying debt. This has enabled us to move capital into those markets where we see moreprofitable returns whilst significantly reducing our leverage and strengthening our capital base. This has all been achieved without compromising our global network or compromising our focus on delivering world classcustomer service. When taking into account profit from divestments and monetisations, the profit attributable to owners ofthe Company was $749 million. We continue to invest in our portfolio with an additional 10 million TEU becoming operational during 2013 and 2014. Thisnew capacity will come into markets where there is significant demand for container terminal capacity, such as Brazil andthe UAE, or where the existing infrastructure is insufficient to meet the changing requirements of our customers, forexample in the UK and the Netherlands. Progress against Strategy DP World continues to make good progress towards the delivery of our strategy. With our focus on incremental revenuegeneration and improving operational efficiencies, as well as delivering new capacity, we will drive profitable growth anddeliver our longer-term objective of improving returns. Following another strong performance in 2012, we remain on track to reach global capacity of 100 million TEU, 50% adjustedEBITDA margin and 15% return on capital employed7 over the medium-term, whilst retaining a strong capital base. We havegross capacity of 70 million with utilisation rates in excess of 80%. In 2012, we reported an increase in adjusted EBITDAmargin to 45.1% and further improvement in return on capital employed to 6.8%. DP World has invested more than $6 billion to add over 20 million TEU of operational capacity over the past five to sixyears and a further 10 million TEU will be added in the next two years. Today's results are diluted by this significantinvestment. However, we will see further improvement as this capacity matures and as we continue to focus on priceimprovements, cost management and efficiencies across the remainder of our portfolio. Our balance sheet remains very strong. With another year of strong cash performance, net cash flow from operationsincreased to $1,231 million. The improvement in cash flow combined with the proceeds of divestments or monetisationsduring 2012 has resulted in lower net debt of $2,871 million as at 31 December 2012. Our leverage (net debt to adjustedEBITDA) remains low at 2.0 times, which gives us the flexibility to continue to invest in new opportunities whilstretaining a strong capital base. In line with our strategy, DP World is focused on investing for the long term capacity requirements of our customers,whether it is in developed markets which do not have the efficiencies or capabilities to handle the increasing size ofvessels, or in developing markets, which have limited container port capacity to meet their growing needs. New projects at Embraport (Brazil), London Gateway (UK), Rotterdam (Netherlands) and NSCIT (India) as well as the expansionof our flagship facility at Jebel Ali (UAE), will add a significant amount of infrastructure to the DP World network. Dividend The Board is recommending a full year dividend of 24 US cents per share (2011: 24 US cents per share). This comprises anincrease of 10% in the ordinary dividend to 21 US cents per share, supplemented by a special dividend of 3 US cents pershare reflecting the profit attributable to owners of the Company from separately disclosed items. This will result in atotal dividend distribution of $199 million reflecting continued confidence in our ability to generate cash and support ourgrowth plans whilst maintaining a consistent dividend payout. Subject to approval by shareholders, the dividend will be paid on 30 April 2013 to shareholders on the relevant register asat the close of business on 2 April 2013. Outlook Operating conditions in each of our markets in the first two months of 2013 have been consistent with those experienced atthe end of last year and the economic environment continues to remain uncertain. We remain confident about the long term outlook of our industry and remain well positioned to deal with a changing economicenvironment as well as continue to focus on our established high standards of service to customers. Sultan Ahmed Bin Sulayem Chairman Group Chief Executive's Review Global trade lies at the heart of DP World's business. Ensuring our ports are well placed to capture current and futuretrade flows is essential to our success and creating value for all stakeholders. The patterns of global trade continue to evolve as the balance of economic activity shifts to the south and the east andemerging markets take an increasing share of world economic activity. Figures from the United Nations Conference of Trade and Development show that in 2011, developing countries had a 40.4%share of global manufactured exports. In some categories the export market share of these countries grew by over 30percentage points in only 15 years. While industrialised Asian countries still dominate these trends, one of the growing patterns is for increasedintra-regional trade. Over the 2000-2010 period, south-south exports grew from 13% to 23% of world trade. China-Indiatrade has more than doubled since 2007 and Africa is also an increasingly important part of the picture. Trade betweenChina and Africa is likely to be over $200 billion in 2012. The World Trade Organisation has suggested at this rate ofincrease - 25% year on year - Africa could, within three to five years, surpass the EU and US to become China's largesttrade partner. Another factor at play is the "Made in the World" phenomenon as manufacturing processes continue to become global;developing countries increasingly act as producers and markets for each other. World Trade Organisation figures show almost60% of trade in goods is in intermediate goods with the average import content of exports around 40%. With manufacturing continuing to shift to cheaper locations, middle class consumers in the emerging markets are playing anincreased role in global demand for goods. These trends are set to continue. To date, however, port development has not kept pace with these changes. Volume growth has been almost double the rate ofnew capacity growth, resulting in a significant lack of global container terminal capacity today. Shortage of capacity is further exacerbated by the fact that much of the developed world port capacity is over 30 years oldand increasingly no longer fit for purpose. This point takes on increased relevance with the arrival this year of a newbreed of ultra-large container ships at 18,000 TEU. These vessels are around 400m in length, which is larger than theaverage 300-350m container berth. The shift to these new vessels by our customers, the shipping lines, represents a significant operational change on theAsia to Europe routes. This in turn has led to a cascade of sub 8,000 TEU vessels being deployed on 'smaller' or emergingtrade routes, which can add further to bottle-necks because many of the smaller emerging market ports are not yet capableof handling these larger vessels. Meanwhile, cargo owners are increasingly focused on short lead times and real time inventories, pushing port operators toimprove terminal efficiencies to move goods along the supply chain more quickly. Our investment in London Gateway forexample is expressly for this reason, to improve the efficiency of the UK supply chain. Responding to these different operating challenges is critical to fulfilling our customers' requirements and ensuring anefficient supply chain. We do this through implementing processes, training and efficient equipment. We are very focusedon investing to improve the reliability and performance of our container terminals for the benefit of our customers and weare already seeing results. In Dakar (Senegal) for example, truck turnaround time has decreased from 8 hours to 45minutes, in Dubai (UAE) it has reduced to 25 minutes and in Constanta (Romania) to 21 minutes. This allows a higher numberof deliveries and pick up's each day and helps reduce congestion in port cities. With the average life of a container port concession across the industry in excess of 30 years, DP World must take a longterm view in positioning the company to respond to these trends. Over the past five to six years DP World has invested more than $6 billion adding over 20 million TEU of new capacity andgrowing ahead of the market. Our investment has focused on ensuring we have the capacity to match customer needs by: - matching investment to changing trade lanes (such as in Africa, Turkey, Latin America); - matching investment for larger vessels (such as in London Gateway and Jebel Ali); and - matching investment to emerging market growth (such as in India). The investment we are making now will ensure we are the best positioned port operator to respond to these significantchanges to the global supply chain. We are already one of the best placed terminal operators to handle these largervessels across our portfolio. We handled 1,283 ultra-large container ships globally in 2012, 72% more than last year. Thishas driven higher utilisation across our portfolio and increased our market share. By 2015 we expect to have approximately 85 million TEU of capacity globally, with 30% of our capacity in the Middle Eastand Africa, markets that are forecast to grow significantly. Our aim by 2020 is to be operating 100 million TEU ofcapacity, retaining our 10% market share and our 75% focus on emerging markets. Uncertainty persists in the global economic outlook. Volumes on major trade routes such as Asia to Europe will come understress during 2013 owing to a weak Eurozone economy. However, the DP World geographic network positions us effectively totake advantage of the strong intra-Asia trade and Middle East trades, the growing African market and the relatively stablemarkets of the Americas. We see plenty of opportunity to further expand our portfolio with an emphasis on emerging marketsin Africa, Central and South America and Asia. Mohammed Sharaf Group Chief Executive Officer Operating and Financial Review This year, we have focused on our existing operations through the delivery of exceptional customer service from improvedefficiencies in our terminals. This has allowed us to deliver good revenue growth and manage costs, resulting in animprovement in adjusted EBITDA margin to 45.1%. Whilst the operating environment has remained challenging in some of our regions, it is the strength of our operations inAfrica, Middle East, South America and Asia which has supported our improvement in adjusted EBITDA to $1,407 million. In 2012 we continued to actively manage our portfolio, strategically divesting or monetising some of our terminals. Thismakes a comparison with the prior year more challenging. Like for like growth at constant currency, where referenced below,is a better comparison as this is without the addition of (a) new capacity at Paramaribo (Suriname) (b) divestedequity-accounted investees Tilbury (UK), P&O Trans Australia (POTA), Aden (Yemen), Adelaide (Australia), Vostochny (Russia)and DMS (P&O Maritime) (c) the deconsolidation of our five Australian terminals and (d) the impact of exchange rates as ourfinancial results are translated into US dollars for reporting purposes. USD Million before separately disclosed items8 2012 2011 % change Consolidated throughput (TEU '000) 27,097 27,471 (1%) Revenue 3,121 2,978 5% Share of profit (loss) from equity-accounted investees 134 142 (6%) Adjusted EBITDA 1,407 1,307 8% Adjusted EBITDA margin 45.1% 43.9% - Profit for the year attributable to owners of the Company 555 459 21% Revenue for our consolidated terminals was $3,121 million, 5% ahead of the prior year. Containerised revenue accounted for77% of our total revenue and was $2,411 million for the year, 2% ahead of the previous year. In spite of the 1% decline inthroughput, container revenue per TEU increased 4% as we focused on handling higher revenue container volumes andimplemented price increases particularly in the Middle East, Europe and Africa region. Non-container revenue was $710million, 14% ahead of the prior year and accounted for 23% of total revenue. During the year we divested a number of terminals from our equity-accounted investee's portfolio, in particular in theMiddle East, Europe and Africa region. Our share of profit from equity accounted investees was lower than last year at$134 million. However, excluding these divestments, the portfolio performed well, delivering 9% like for like growth atconstant currency as terminals in the Americas and Australia region, and Middle East, Europe and Africa region performedstrongly. Adjusted EBITDA continued to improve reaching $1,407 million, an increase of 8%, due to strong growth in the Middle East,Europe and Africa region. Adjusted EBITDA margin expanded to 45.1% as utilisation rates improved to over 80%, terminalefficiencies improved and we maintained good cost discipline. Profit for the year attributable to owners of the Company, before separately disclosed items, was $555 million and 21%ahead of the prior year following the increase in adjusted EBITDA growth and a $17 million reduction in net finance costs,depreciation and amortisation from the prior year. On a like for like basis at constant currency9 , revenue was 10% ahead and adjusted EBITDA was 11% ahead of the prioryear. During 2012, we invested $685 million across our portfolio. This was significantly lower than expected as some of ourplanned capital expenditure in 2012 will now come in 2013. This will not impact the timing of the delivery of newcapacity, but is simply a function of when equipment is invoiced and paid for. Investment in new developments accounted for approximately 57% of our total capital expenditure with the majority focusedon our new development at London Gateway (UK), which will open with 1.6 million TEU of capacity in the fourth quarter of2013. Expansion of existing facilities accounted for 27% of our total capital expenditure, supporting the expansion of Jebel Aliwhere an additional 1 million TEU is on track to open at Terminal 2 in 2013 and a further 4 million TEU is due to open atTerminal 3 in 2014. Middle East, Europe and Africa The Middle East, Europe and Africa region delivered an excellent performance with a 19% improvement in adjusted EBITDA, andfurther improvement in adjusted EBITDA margin to 48.3% as both container revenue per TEU and non-container revenueincreased. This reflects the strategic positioning of our terminals toward the stronger economies with a focus on theorigin and destination markets and compensates for weaker trade across continental Europe. USD million before separately disclosed items 2012 2011 % change Consolidated throughput (TEU '000) 19,202 19,110 1% Revenue
2,112 1,884 12% Share of profit (loss) from equity-accounted investees 24 14 69% Adjusted EBITDA 1,021 861 19% Adjusted EBITDA margin 48.3% 45.7% - Revenue was $2,112 million, 12% ahead of the prior year as container volumes increased 1% and container revenue per TEUincreased 10% following price increases in this region. Non-container revenue increased 19% to $493 million, primarilydriven by the UAE where we saw an increase in demand related to construction, tourism and roll-on roll-off cargo. Our share of profit from equity-accounted investees increased to $24 million as a stronger performance from the Africa andMiddle East terminals mitigated a weaker performance in European ports where volumes softened and recent divestmentsimpacted our share of profit. Adjusted EBITDA was $1,021 million, 19% ahead of 2011 as the increase in revenue combined with improved productivity,higher utilisation and good cost management resulted in higher adjusted EBITDA margin of 48.3%. The UAE region delivered another excellent performance with container revenue per TEU increasing by 18%. This growth inrevenue is as a result of proactive pricing measures for both container stevedoring and container storage. Non-containerrevenue grew by 28% as the region continued to benefit from an improvement in economic performance, driven by the tourismand retail sectors and an increase in the number of infrastructure projects. Investment in our Middle East, Europe and Africa portfolio was $575 million during 2012. This investment was focused onLondon Gateway (UK), which will open with 1.6 million TEU in 2013, and the extension of Jebel Ali (UAE) where an additional1 million TEU at Terminal 2 will open in 2013 and 4 million TEU at Terminal 3 is expected in 2014. During the year, some of our Europe and Middle East equity-accounted terminals were divested as we took the opportunity torecycle capital into high return businesses in faster growing markets where we have management control. Divestmentsincluded container terminals at Tilbury (UK), Aden (Yemen) and Vostochny (Russia). In addition, as part of a restructuringat Antwerp (Belgium), we divested our break bulk facility to focus on container terminal operations. Excluding thesedivestments, like for like revenue growth at constant currency10 was 13% ahead of the prior year and adjusted EBITDA was20% ahead. Asia Pacific and Indian Subcontinent The Asia Pacific and Indian Subcontinent region took a strategic decision to focus on handling a smaller number of highermargin containers. Whilst this has reduced revenue and adjusted EBITDA, adjusted EBITDA margin increased to 65.6%. Theregion was also impacted by unfavourable currency movements. USD million before separately disclosed items 2012 2011 % change Consolidated throughput (TEU '000) 5,401 5,578 (3%) Revenue 457 500 (9%) Share of profit (loss) from equity-accounted investees 111 117 (6%) Adjusted EBITDA 299 322 (7%) Adjusted EBITDA margin 65.6% 64.5% - Revenue across the region fell 9% to $457 million due to the reduction in container volumes, lower storage revenue inKarachi (Pakistan) and unfavourable currency movements. Non-container revenue improved 8% to $63 million as we saw agreater contribution from our rail service in India and non-container revenue in some Indian ports. Whilst our portfolio of terminals accounted for as equity accounted investees performed well in 2012, the comparison withthe prior year was impacted by higher profit in 2011 from a one-off government rent and rates refund in Asia. Excludingthis, profit from our portfolio of equity-accounted terminals was slightly lower than the prior year. Adjusted EBITDA was $299 million, 7% lower than last year on account of the lower revenue and lower contribution from ourshare of profit from equity accounted investees. However, our decision to focus on higher margin containers in India hasresulted in higher adjusted EBITDA margin of 65.6%. Excluding unfavourable currency movements, like for like revenue growth at constant currency11 declined 3% and adjustedEBITDA declined 6% when compared with the prior year. On 7 March 2013, DP World entered into a strategic partnership with Goodman Hong Kong Logistics Fund, monetising 75% of itsinterests in CSX World Terminals Hong Kong Limited (CT3), which operates berth 3 of the Kwai Chung Container Terminal (CT3)and ATL Logistics Centre Hong Kong Limited (ATL), a logistics centre located alongside CT3. As part of the strategicpartnership, DP World will continue to manage the port operations. Completion, subject to regulatory approvals, isexpected to be towards the end of the first half of 2013. On the same day, DP World divested all of its interest in Asia Container Terminals Holdings Limited, the holding company ofthe entity that owns and operates Asia Container Terminal 8 West (CT8). The total consideration for the two transactions was $742 million and the total net gain is expected to be approximately$151 million, subject to transaction costs and currency movements. Australia and Americas Our terminals in the Americas and Australia region delivered a strong underlying12 revenue performance in 2012. Howeverthis has not been converted into equally strong adjusted EBITDA growth due to weaker results from our equity-accountedinvestees which were impacted by pre-operational costs in Embraport (Brazil) and the impact of one-off non-core expenses inthe region. USD million before separately disclosed items 2012 2011 As reported % change Underlying % change Consolidated throughput (TEU '000) 2,494 2,782 (10%) 12% Revenue 553 594 (7%) 14% Share of profit (loss) from equity-accounted investees (1) 10 (110%) (7%) Adjusted EBITDA 166 203 (18%) 2% Adjusted EBITDA margin 30.0% 34.2% - - Revenue was $553 million for the year, down 7% due to the deconsolidation of Australian terminals from 12 March 2011. Onan underlying basis this was 14% ahead, reflecting a 4% improvement in container revenue per TEU and a 3% improvement innon-container revenue. We reported a loss of $1 million on our share of profit from equity-accounted investees. This was due to the higherinterests costs associated with the new capital structure in relation to our joint venture in Australia, pre-operationalexpenses in relation to our new development in Embraport (Brazil) and the exclusion of profit from P&O Trans Australia(POTA) and Adelaide (Australia), which were divested in 2011 and 2012 respectively. Adjusted EBITDA was $166 million, down 18% on a reported basis principally due to the deconsolidation of Australianterminals and divestments. On an underlying basis adjusted EBITDA was 2% ahead as we continued to grow underlying revenueand maintain good cost control. The adjusted EBITDA margin of 30% was diluted by the loss of profit from equity-accountedinvestees. Like for like revenue growth at constant currency13 was 11% ahead of the prior year as volumes grew 10% and adjustedEBITDA decreased 3%. Capital Expenditure During 2012, we invested $685 million across our portfolio. This was significantly lower than expected as some of ourplanned capital expenditure in 2012 will now come in 2013. This will not impact the timing of the delivery of newcapacity, but is simply a function of when equipment is invoiced and paid for. Our three year forecast for capital expenditure between 2012 and 2014 remains at $3.7 billion with the expectation ofinvesting approximately $1.8 billion and $1.1 billion in 2013 and 2014 respectively. From 2015 onwards we expect capitalexpenditure, including maintenance capital expenditure, to significantly reduce. Investment in new developments accounted for approximately 57% of our total capital expenditure with the majority focusedon our new development at London Gateway (UK) which will open with 1.6 million TEU of capacity in the fourth quarter of2013.
Expansion of existing facilities accounted for 27% of our total capital expenditure, supporting the expansion of Jebel AliPort where an additional 1 million TEU is on track to open at Terminal 2 in 2013 and a further 4 million TEU is due to openat Terminal 3 in 2014. Alongside these larger capital investment projects, additional capital expenditure was focused on our existing portfolio toensure that our terminals are improving efficiencies and productivity. Net Finance Costs As at 31 December 2012, gross debt was $4.8 billion and cash balances were $1.9 billion. In April 2012, we repaid a $3 billion syndicated loan facility using some of the cash held on our balance sheet. Therepayment of the loan facility resulted in lower finance costs of $364 million for the year and reduced finance income of$75 million. Net finance costs of $289 million remained broadly in line with the previous year. Interest Cover (adjusted EBITDA and net finance costs) improved to 4.9 times in 2012. Taxation DP World is not subject to income tax on its UAE operations. The tax expense relates to the tax payable on the profitearned by overseas subsidiaries, as adjusted in accordance with taxation laws and regulations of the countries in whichthey operate. For 2012, DP World's income tax expense was $73 million before separately disclosed items. The effective tax rate before separately disclosed items was 14.9%, lower than the prior year, due to a change in the mixof our profit. Profit Attributable to non-controlling interests (minority interest) Profit attributable to non-controlling interests (minority interests) was higher than the prior year at $80 million due toa stronger performance in those terminals where there is a larger non-controlling interest. The key terminals where we have non-controlling interest in 2012 are CT3 (Hong Kong), Doraleh (Djibouti), Karachi(Pakistan), Buenos Aires (Argentina) and Southampton (UK). Separately Disclosed Items In 2012, DP World reported separately disclosed items of $192 million. This comprised $249 million profit on sale ofbusinesses and our share of profit of equity-accounted investees. These profits were netted off against impairment ofassets and restructuring costs, ineffective interest rate swaps and currency options and income tax expenses. Balance Sheet In 2012, total assets reduced to $16.4 billion as cash balances decreased due to the repayment of debt using cash from thebalance sheet. Total equity increased to $8.7 billion due to an increase in retained earnings. The Group's investment in equity-accounted investees reduced to $3.3 billion as we made a number of divestments from thisportfolio during the year. Cash Flow Net cash from operating activities was $1,231 million, an increase of $251 million over 2011 due to better performance fromour terminals. Net Debt As at 31 December 2012 net debt was $2.9 billion (gross debt of $4.8 billion and cash of $1.9 billion). This compares witha net debt of $3.5 billion as at 30 June 2012. Net debt is significantly lower due to increased net cash from operatingactivities, and proceeds from divestments. Long-term corporate bonds totalled $3.25 billion, made up of $1.75 billion 30-year unsecured MTN due in 2037 and $1.5billion 10-year unsecured sukuk due in 2017. In addition we have $1.5 billion of debt at the subsidiary level. Leverage (net debt to adjusted EBITDA) decreased to 2.0 times. Following the transactions in Hong Kong, our leverage willreduce further. Return on Capital Employed In 2012, we reported an improvement in return on capital employed (EBIT divided by total assets less current liabilities)to 6.8%. DP World has a portfolio of long-term assets with an average concession life of approximately 40 years. As at the end of2012, 26% of our capacity was less than five years old and we have four major projects at pre-operational stage ofdevelopment. This means a significant proportion of our assets are some way from delivering maximum potential EBIT whichdilutes the overall returns. However, as this capacity becomes operational and matures we expect our returns to makesteady progress towards 15%. Mohammed SharafGroup Chief Executive Officer Yuvraj NarayanChief Financial Officer DP World Limited and its subsidiaries Consolidated income statement for the year ended 31 December 2012 Year ended 31 December 2012 Year ended 31 December 2011 Notes Before separatelydisclosed items Separatelydisclosed items(Note 11) Total Before separatelydisclosed items Separatelydisclosed items(Note 11) Total USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 Revenue 7 3,121,017 - 3,121,017 2,977,731 - 2,977,731 Cost of sales (2,002,806) - (2,002,806) (2,005,159) - (2,005,159) ------------ ----------- ------------- ------------ ----------- ------------- Gross profit 1,118,211 - 1,118,211 972,572 - 972,572 General and administrative expenses (276,900) (55,850) (332,750) (256,961) (243,862) (500,823) Other income 21,643 - 21,643 21,029 - 21,029 Profit on sale and termination of businesses (net of tax) 11 - 237,204 237,204 - 484,354 484,354 Share of profit/ (loss) from equity-accounted investees (net of tax) 15 133,897 20,710 154,607 141,711 (3,047) 138,664 ------------
---------- ------------ ---------- ---------- ------------ Results from operating activities 996,851 202,064 1,198,915 878,351 237,445 1,115,796 --------- ---------- ------------ ---------- ---------- ------------ Finance income 9 75,211 - 75,211 135,361 - 135,361 Finance costs 9 (364,092) (10,373) (374,465) (422,931) (10,770) (433,701) ---------- --------- ---------- ---------- --------- ---------- Net finance costs (288,881) (10,373) (299,254) (287,570) (10,770) (298,340) ---------- --------- ---------- ---------- --------- ---------- Profit before tax 707,970 191,691 899,661 590,781 226,675 817,456 Income tax expense 10 (72,954) - (72,954) (59,042) (7,211) (66,253) ----------- ---------- ---------- ----------- ---------- ---------- Profit for the year 8 635,016 191,691 826,707 531,739 219,464 751,203 ====== ====== ====== ====== ====== ====== Profit attributable to: Owners of the Company 555,390 193,216 748,606 458,620 224,672 683,292 Non-controlling interests 79,626 (1,525) 78,101 73,119 (5,208) 67,911 ----------- ----------- ----------- ----------- ----------- ----------- 635,016 191,691 826,707 531,739 219,464 751,203 ====== ====== ====== ====== ====== ====== Earnings per share Basic and diluted earnings per share - US cents 22 90.19 82.32 ===== ===== The accompanying notes form an integral part of these consolidated financial statements. For a full set of notes 1-35 please visit DP World website atwww.dpworld.com DP World Limited and its subsidiaries Consolidated statement of comprehensive income for the year ended 31 December 2012 2012 2011 Notes USD'000 USD'000 Profit for the year 826,707 751,203 ---------- ---------- Other comprehensive income Foreign exchange translation differences for foreign operations * 104,135 (202,057) Foreign exchange profit recycled to consolidated income statement on sale of businesses (2,131) (425,773) Effective portion of net changes in fair value
of cash flow hedges (24,768) (52,308) Net change in cash flow hedges recycled to consolidated income statement 10,373 - Net change in fair value of available-for-sale financial assets 16 (132) 8,939 Defined benefit plan actuarial losses 24 (49,900) (110,400) Share in other comprehensive income of equity-accounted investees (8,686) (10,268) Income tax on other comprehensive income: Fair value of cash flow hedges 10,444 14,595 Defined benefit plan actuarial losses 500 2,245 --------- ---------- Other comprehensive income for the year, net of income tax 39,835 (775,027) ---------- ---------- Total comprehensive income/ (loss) for the year 866,542 (23,824) ====== ====== Total comprehensive income/ (loss) attributable to: Owners of the Company 788,531 (82,589) Non-controlling interests 78,011 58,765 ----------- ---------- 866,542 (23,824) ====== ====== * A significant portion of this includes foreign exchange translation differences arising from the translation ofgoodwill and purchase price adjustments which are denominated in foreign currencies at the Group level. The translationdifferences arising on account of translation of the financial statements of foreign operations whose functional currenciesare different from that of the Group's presentation currency on Group consolidation are also reflected here. There are nodifferences on translation from functional to presentation currency as the Company's functional currency is currentlypegged to the presentation currency (refer to note 2(d)). The accompanying notes form an integral part of these consolidated financial statements. For a full set of notes 1-35please visit DP World website atwww.dpworld.com DP World Limited and its subsidiaries Consolidated statement of financial position as at 31 December 2012 2012 2011 Notes USD'000 USD'000 Assets Non-current assets Property, plant and equipment 12 5,413,262 5,124,120 Goodwill 13 1,588,918 1,607,655 Port concession rights 13 3,115,084 3,223,958 Investment in equity-accounted investees 15 3,348,317 3,451,264 Deferred tax assets 10 105,753 101,212 Other investments 16 60,833 73,193 Accounts receivable and prepayments 17 263,428 260,114 ------------- ------------- Total non-current assets 13,895,595 13,841,516 ------------- ------------- Current assets Inventories 53,283 54,979 Accounts receivable and prepayments 17 603,103 624,020 Bank balances and cash 18 1,881,928 4,159,364 Assets held for sale 28 - 77,706 ------------- ------------- Total current assets 2,538,314 4,916,069 ------------- ------------- Total assets 16,433,909 18,757,585 ======== ======== DP World Limited and its subsidiaries Consolidated statement of financial position (continued) as at 31 December 2012 2012 2011 Notes USD'000 USD'000 Equity Share capital 19 1,660,000 1,660,000 Share premium 20 2,472,655 2,472,655 Shareholders' reserve 20 2,000,000 2,000,000 Retained earnings 2,936,637 2,367,164 Hedging and other reserves 20 (122,229) (104,408) Actuarial reserve 20 (398,302) (352,402) Translation reserve 20 (482,909) (586,555) ------------ ------------ Total equity attributable to equity holders of the Company 8,065,852 7,456,454 Non-controlling interests 663,993 765,013 ------------ ------------ Total equity 8,729,845 8,221,467 ------------ ------------ Liabilities Non-current liabilities - More to follow, for following part double clickID:nRST3971Ab
