Alexa

DP World profit drops 32 percent amid trade slump

DP World profit drops 32 percent amid trade slump

Port operator DP World said Thursday its profit slumped by about a third in the first half of the year as it weathered a "very challenging operating environment" spurred by the drop in global trade.
The Dubai-based cargo handler said the number of shipping containers at its ports dropped by 10 percent from a year earlier, reflecting a worldwide decline in trade flows. The business of moving profitable bulk goods and liquids such as fuel is also down.
CEO Mohammed Sharaf said the market remains unpredictable.
"I really can't tell you what's coming our way right now," he told reporters in a conference call. "It's really difficult to say."
DP World said it earned $187.7 million in the six months through June, down from $275.3 during the same period a year earlier. That's a drop of 32 percent.
The company said earnings from continuing operations fell 34 percent, after accounting for one-time adjustments.
Sharaf said DP World is trying to be flexible with its shipping line customers, many of whom are struggling through what industry veterans say is the toughest period ever for the container shipping business.
"What we're hearing from them is volumes are picking up, but their revenues are not," he said. "We expect they are going to continue to come for help, and we're going to hold on."
Pain for the shipping lines means less cash for port operators such as DP World. Its revenue during the first half fell to $1.38 billion, compared with $1.60 billion a year before.
It has responded by trimming costs by 5 percent and continues to look for ways to save money, Sharaf said.
DP World has grown quickly, adding ports in Algeria and Djibouti to its portfolio in recent months. The downturn, however, has prompted the company to put about half of its capacity expansion plans on hold.
Among the projects being delayed is the massive London Gateway, which is slated to become Britain's first new deep-sea container port in more than a quarter century. Sharaf said the project remains under review.
"We can't say what's going to happen tomorrow," he said.
DP operates 49 ports on six continents, including the Middle East's biggest in Dubai.


Updated : 2021-01-17 14:28 GMT+08:00