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Dubai’s DP world reported a surge in net profit for 2018, triggering a rally in the company’s shares on Thursday.
The Dubai-based port operator made a net profit attributable to owners after separately disclosed items of $1.3 billion, compared to $1.18 billion in 2017 (a 10.2 percent rise), the company said in a statement.
Rita Guindy, director of research at Arqaam Capital, told Zawya by email that the company's profit was boosted by a “robust” result during the second half of the year.
The company reported a net profit attributable to owners of $655 million after separately disclosed items in the second half of 2018 (H2 2018), compared to $633 million for H2 2017 - a 3.5 percent increase.
Revenue in H2 2018 rose 24.5 percent to $3.02 billion, from $2.43 billion in H2 2017.
Guindy said that the rise in revenue was mainly due to “the consolidation of acquisitions including Drydocks World, Dubai Maritime City (DMC), Cosmos Agencia Marítima (CAM) and Continental Warehousing Corporation (CWC).”
The company’s shares ended the trading session 6.17 percent higher on Thursday, but have dropped 4.39 percent so far since the start of this year.
“Overall, (second-half) results offer reassurance on DP World’s ability to grow revenue and net income above market averages through acquisitions,” Guindy said.
“We highlight that the outlook on trade growth remains cautious; however, recent progress on the US-China trade deal and a higher probability of resolution, are likely to be positive for sentiment around the stock and also for global trade growth,” she added.
DP World’s stock was last trading at $16.35 on Thursday.
“Valuations are attractive with 11.2x FY 19e (fiscal year 2019 expected) P/E (price to earnings ratio), a 20% discount to peers (vs. 19% average premium in last five years),” she ended.
(Reporting by Gerard Aoun; Editing by Michael Fahy)
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