DP World profit falls on lower volumes
By Tarek El-Tablawy |
January 26, 2010, Tuesday
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Print Edition
Print Edition
PORT operator DP World, the subsidiary of debt-saddled Dubai conglomerate Dubai World, said yesterday its 2009 pre-tax profits fell as the global recession led to a decline in container volumes.
Dubai-based DP World said container volumes for the full year fell 8 percent across its 28 consolidated terminals compared with 2008. Excluding contributions from its new terminals, volumes fell 10 percent in what it described as the "most challenging" year for the container port industry.
Its focus on emerging markets had helped it outperform the industry as a whole, the company said. But its chief executive added that despite improvements in the second half of the year, it was difficult to predict what would happen this year.
"As anticipated, all our regions handled more containers in the second half of 2009 than in the first half and the early signs of stability seen in the third quarter have continued into the final quarter of the year," company Chief Executive Mohammed Sharaf said. "Customer confidence, whilst improving, remains fragile with limited visibility for the medium term."
Sharaf said the 8 percent decline in volumes "will lead to a decline in full year profit before tax against the same period last year."
The statement did not include financial results.
The global recession hammered international trade as economies slowed. While signs of a recovery have grown in recent months, analysts are cautious about the sustainability of the rebound.
The company's focus on cost-cutting had "mitigated the downside," with 2009's anticipated results being in line with expectations, Sharaf said. But he added that while performance had improved in the second half of the year, "predicting global trends in 2010 remains challenging."
DP World, which operates 49 terminals on six continents, including the Middle East's biggest in Dubai, is majority owned by Dubai World - the conglomerate that served as the chief engine for growth for Dubai.
Dubai World rattled world markets late last year by announcing that it was seeking a "standstill" - effectively a delay - in repayment of US$26 billion of its US$60 billion in debts.
The bills were amassed during a decade of growth as the company relied on cheap credit and easy financing.
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