Dubai-based global port operator DP World Limited has announced resilient financial results for the first six months to 30 June 2023 with its revenue growing 13.9% to $9.037 billion on a reported basis. 

 

It said net profit attributable to the owners fell nearly 10% in H1 2023 to $651 million. Adjusted EBITDA grew by 7% to $2.611 billion with adjusted EBITDA margin of 28.9%. 

 

The company said it achieved solid H1 2023 performance but outlook remained uncertain due to geopolitics, inflationary environment, higher interest rates and currency fluctuations. 

 

DP World remains positive on the medium to long-term outlook for global trade and is focused on delivering integrated supply chain solutions to cargo owners to drive sustainable returns, it said. 

 

Results Highlights 

* Revenue growth of 13.9% is mainly attributable to the full six months consolidation of Imperial Logistics (2022 – 4 months). 

* Like-for-like growth driven mainly from strong performance of Imperial Logistics in Africa and Drydocks World in UAE. 

* Adjusted EBITDA grew 7% on higher revenue growth and EBITDA margin for the year stood at 28.9%. Like-for-like adjusted EBITDA margin stood at 30.8%. 

* Cash generation remains robust and balancesheet strong 

* Net cash generated from operating activities stood at $1.951 billion H1 2023 (compared to $1.931 billion in H1 2022). 

* Leverage (Net debt to adjusted EBITDA) on a pre-IFRS16 basis stands at 2.8x (FY2022: 2.7x). On a post-IFRS16 basis, net leverage stands at 3.2 times compared to 3.0 times in FY2022. 

* DP World credit rating improves to BBB+ with Stable Outlook 

* DP World’s credit rating improved by two notches by Fitch to BBB+ with Stable Outlook and one notch by Moody’s to Baa2 with Stable Outlook on improved financial performance and a stronger balance sheet. 

* DP World is committed to a strong investment grade rating in the medium term. 

* Selective investment in key growth markets 

* Capital expenditure of $910 million ($741 million in 1H 2022) was invested across the existing portfolio. Capex split: $412 million Ports and Terminals, $284 million Logistics and Parks and Economic Zones, $187 million Marine Services and $27 million in Head Office. 

* Capital expenditure guidance for 2023 is for approximately $2 billion to be invested in UAE, Jeddah (Saudi Arabia), London Gateway (United Kingdom), Dakar (Senegal), Callao (Peru) and DPW Logistics (South Africa). 

* Committed to investing more than $500 million to reduce CO2 emissions by 700k tonnes in the next 5 years. 

 

DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented: "We are pleased to share a resilient set of results for the first half of 2023, with our adjusted EBITDA enhancing by 7% to surpass $2.6 billion. Despite facing a softer container market and weakened freight rates amid challenging economic conditions, our focus on high-margin cargo, end-to-end bespoke supply chain solutions and cost optimization has been crucial in securing these results. This strategy has not only been effective during these challenging times but also lays the foundation for our sustainable long-term growth and returns. 

 

"Our logistics vertical has demonstrated robustness in this demanding economic landscape, attracting more cargo owners to our platform. The positive feedback to our end-to-end product emphasis the value of our customised solutions enables customers to conduct trade more effectively. Strategic investments in high-growth sectors enable us to provide value-added solutions, and we remain committed to continuously enhancing our logistics platform. This includes addressing supply chain inefficiencies and enhancing connectivity in crucial trade lanes to serve cargo owners better," he said. 

 

Notably, DP World continues to make substantial progress towards its 2050 net zero carbon target. "Our recent investment in renewable energy through the I-REC programme has significantly cut DP World UAE business carbon emissions by 47%. We are confident of achieving our goal to cut CO2 emissions by 700k tonnes which accounts for approximately 22% of our total emission within the next five years," said Bin Sulayem. 

 

"In summary, our balance sheet remains robust, and we continue to generate high levels of cash flow, which provides us the flexibility to invest in the growth of our existing portfolio and new investment opportunities when they arise. While the near-term trade outlook may be uncertain due to macroeconomic and geopolitical factors, the solid financial performance of the first six months positions us well to deliver a steady set of full-year results. We remain optimistic about the medium to long-term prospects of the industry and DP World’s capacity to consistently generate sustainable returns," he said. - TradeArabia News Service