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Port firm says traffic down 8% this year

CARGO-HANDLER DP World said yesterday that business at its ports dropped 8 percent in the first two months of this year as global trade evaporated because of the economic slump.

The slowdown shows no signs of easing. The CEO of the Dubai-based company, one of the world's biggest and most geographically diverse port operators, said market conditions are changing on an almost daily basis, making it impossible to predict how badly the business might suffer this year.

"Volumes are just disappearing," Chief Executive Mohammed Sharaf said in a round-table with reporters. "It's not that we are losing our business to our competition ... It's just not there. It's gone."

Trade at the company's ports in the developing world is faring better than in more established regions, where it has seen double-digit declines, he said.

The bleak outlook comes despite strong 2008 sales growth.

DP World said it earned US$530.7 million last year, compared with US$1.15 billion in 2007, when it booked a large gain on the sale of United States ports to American International Group Inc amid a political firestorm.

After adjusting for that sale and other items, DP World's profit from continuing operations rose to US$620.8 million from US$419.7 million in 2007.

Revenue jumped 20 percent year-on-year to US$3.28 billion, helped by increased capacity from new operations in Yemen, Senegal, Egypt and Spain.

Sharaf said DP World is aiming to cut at least 3 percent of fixed costs from what executives say is already a lean organization, and has laid off a "minimal" number of workers. It also has agreed to accept late payments from some struggling shipping companies in the short term.


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