DP World earnings grow 15.8% in first half of 2017

policy of not less than 20% dividend

DUBAI 25 August 2017: Global trade enabler DP World announced revenue growth of 9.6 per cent for the first half of 2017 ending 30th June. Earning grew 15.8 per cent.

Results Highlights

  •  Revenue of $2,295 million (Revenue growth of 9.6 per cent on reported and 3.0 per cent on like-for-like basis)
  •  Revenue growth of 9.6 per cent supported by the strong volume growth across all three DP World regions.
  • Like-for-like revenue increased by 3.0 per cent driven by a 4.2 per cent increase in total containerized revenue.

Adjusted  Ebitda of $1,225 million and adjusted  Ebitda margin of 53.4 per cent (Like-for-like adjusted  Ebitda margin at 54.8 per cent)

  •  Adjusted  Ebitda grew 4.2 per cent and  Ebitda margin for the half year reached 53.4 per cent. Like-for-like adjusted  Ebitda increased at a stronger pace of 7.0 per cent resulting in a margin of 54.8 per cent.

Profit for the period attributable to owners of the company of $606 million. Strong adjusted  Ebitda growth resulted in a 15.8 per cent increase in profit attributable to owners of the Company before separately disclosed items on a like-for-like basis but on a reported basis earnings remained flat (-0.3 per cent).

Strong cash generation and robust balance sheet and credit rating upgrade

  •  Cash from operating activities amounted to $1,009 million up from $905 million in 1H2016.
  •  Leverage (Net debt to annualised adjusted  Ebitda) decreased to 2.6 times (from 2.8 times at 31 December 2016).
  • DP World was recently upgraded by Fitch Ratings to BBB+ from BBB with stable outlook, after both Fitch and Moody’s upgraded the rating by one notch last year.

 Continued investment in high quality long-term assets with strong supply/demand dynamics

  •  Capital expenditure of $595 million invested across the portfolio during the first half of the year.
  • Capital expenditure guidance for 2017 remains unchanged at $1.2 billion with investments planned into Jebel Ali (UAE), London Gateway (UK), Prince Rupert (Canada) and Berbera (Somaliland).
  •  DP World subsidiary, P&O Maritime, acquired Spanish Maritime Service operator Reyser to further develop the Group’s maritime offering as well as adding complementary or related services to further diversify and strengthen our business.

Rebound in global trade and market share gains

  •  Improved trading environment in first half of 2017 and market share gains from the new shipping alliances driving volumes in the second quarter of the year.
  • Robust performance across all three regions.
  • Well placed to meet full year 2017 market expectations.

DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented: “DP World is pleased to announce a solid set of first half results with attributable earnings of $606 million, and like-for-like earnings growth of 15.8 per cent. Adjusted  Ebitda reached $1,225 million as margins were maintained at above 50 per cent. Encouragingly, after a challenging period, we have seen a pick-up in global trade particularly in the second quarter of the year, and that combined with the ramp up in our recent investments in Yarimca (Turkey), London Gateway (UK), Rotterdam (Netherlands) and JNP Mumbai (India), has delivered ahead-of-market volume growth.

“In the first half of 2017, we have invested $595 million of capex in key growth markets, and announced over $170 million of acquisitions in our maritime business, which offers significant growth opportunities. These investments leave us well placed to deliver on our strategy to strengthen our port related services and capitalize on the significant medium to long-term growth potential of this industry.    “Our balance sheet remains strong and we continue to generate high levels of cashflow, which gives us the ability to invest in the future growth of our current portfolio, and the flexibility to make new investments should the right opportunities arise as well as delivering enhanced returns to shareholders over the medium term.

“Looking ahead to the second half of the year, we expect higher levels of throughput to be maintained. Overall, the steady financial performance of the first six months leaves us confident in meeting full-year market expectations.”


This document contains certain “forward-looking” statements reflecting, among other things, current views on our markets, activities and prospects. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur and which may be beyond DP World’s ability to control or predict (such as changing political, economic or market circumstances). Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of DP World speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Except to the extent required by law, DP World does not undertake to update or revise forward-looking statements to reflect any changes in DP World’s expectations with regard thereto or any changes in information, events, conditions or circumstances on which any such statement is based.

Group Chairman and CEO Statement

The first half of 2017 has witnessed an improvement in global trade and DP World has delivered robust volume growth  as our recent strategic investments begin to deliver. The financial performance has remained robust with adjusted  Ebitda of $1,225 million and profit attributable to owners of the Company of $606 million, which once again reinforces our view that operating a diversified portfolio with a focus on faster growing markets, and origin and destination cargo, will deliver superior earnings growth and enhance shareholder value.

During the first six months, we have seen the consolidation of Pusan (South Korea), further improved contribution from the Jebel Ali Free Zone, and London Gateway signing the game-changing Asia-Europe service with THE alliance. Furthermore, with the formation of the new shipping alliances in April, we have witnessed market share gains accelerating our volumes in the second quarter. These developments have contributed to the growth of our portfolio and we have been able to achieve earnings growth on a like-for-like basis, demonstrating that we have the right strategy and the relevant capacity in the key markets.

Within our existing portfolio, $595 million capital expenditure has been invested in the first half of 2017 in markets with attractive supply and demand dynamics.In July, we have added 1.5 million TEU of capacity to Terminal 3 at Jebel Ali port (UAE). Our flagship port continues to operate at high levels of utilisation and with the recovery in volumes the medium-term outlook remains positive, particularly with the lead up to EXPO 2020. Furthermore, with signing the first regular Asia-Europe service we have opened the third berth at London Gateway (UK) port adding 0.8 million TEU of capacity. Other key capacity additions in 2017 are at Prince Rupert (Canada) and Berbera (Somaliland).

Our balance sheet is strong with relatively low leverage which gives us flexibility to continue to seek growth opportunities in port and other related markets. We aim to continue to add capacity in key growth markets while maintaining the existing shape of our portfolio that has a 70 per cent exposure to origin and destination cargo (O&D) and 75 per cent exposure to faster growing markets.

Group Chief Financial Officer’s Review

DP World delivered a steady set of financial results in the first half of 2017 and continued strong cash generation with profit attributable to owners of the Company at $606 million. Our adjusted  Ebitda was $1,225 million, while our adjusted  Ebitda margin reached 53.4 per cent. Reported revenue grew by 9.6 per cent to $2,295 million, supported by the strong volume growth across all three DP World regions. It is worth noting that our 2017 financials are impacted by the consolidation of Pusan (South Korea), which was previously treated as an equity-accounted investee, while our 1H2016 financials were boosted primarily by favourable currency movements. As always, we provide a like-for-like analysis which is a truer reflection of the underlying business performance. Under a like-for-like basis, first half 2017 revenues grew by 3.0 per cent while consolidated volumes grew by 4.7 per cent, resulting in a like-for-like adjusted  Ebitda growth of 7.0 per cent with margins of 54.8 per cent and a 15.8 per cent increase in profit attributable to owners of the Company before separately disclosed items.

Like-for-like revenue growth was mainly driven by a 4.2 per cent improvement in total containerized revenue, particularly containerized stevedoring revenue, which increased by 5.3 per cent on a like-for-like basis. Total revenue per TEU dropped 1.6 per cent on a like-for-like basis due to a less favourable volume mix.  During the first half of 2017, we pre-paid $250 million term loan due in July and the remaining $387 million outstanding of the 6.25 per cent July 2017 sukuk was repaid on maturity in July 2017. Furthermore, we received the cash for the partial monetisation of our Canadian assets as part of the CDPQ investment partnership. Overall, our low leverage of 2.6 times provides flexibility to support growth either in our existing business, or new opportunities should they become available at attractive prices.During the first half of 2017, we invested $595 million capex in key markets, including projects in Jebel Ali port (UAE), Jebel Ali Free Zone (UAE), London Gateway (UK) and Prince Rupert (Canada). We have already added 0.8 million TEU to London Gateway and 1.5 million to Terminal 3 at Jebel Ali and expect to deliver new capacity of 0.5 million TEU at Prince Rupert in 2H2017.Furthermore, we would like to highlight that DP World Credit rating was upgraded by Fitch to BBB+ from BBB. This followed last year’s upgrade by both rating agencies, Fitch and Moody’s,  and to receive consecutive upgrades in the current market conditions is a true recognition of the strength and resilience of our business alongside our long-term growth potential.

Middle East, Europe and Africa

Market conditions in the Middle East, Europe and Africa region improved as UAE volumes recovered and London Gateway won the regular Asia-Europe service from THE alliance. Volumes in the UAE were up by 4.3 per cent and the EMEA region grew at 5.4 per cent year-on-year in the first half. Reported revenue in the region grew 3.5 per cent to $1,597 million, aided by the performance of the Jebel Ali Free Zone as non-containerized revenue grew 6.0 per cent. On a like-for like basis, revenue grew 1.5 per cent as containerized other revenue grew 3.4 per cent and total containerized revenue grew 2.3 per cent.Adjusted  Ebitda was $945 million, 8.7 per cent ahead of the same period last year mostly due to improved trading in the UAE and new services at London Gateway, while adjusted  Ebitda margin rose to 59.2 per cent. Like-for-like revenue and adjusted  Ebitda growth on prior year at constant currency was 1.5 per cent and 5.8 per cent respectively. Like-for-like adjusted  Ebitda margins stood at 60.8 per cent.We invested $493 million in the region, mainly focused on capacity expansions in Jebel Ali port (UAE), Jebel Ali Free Zone (UAE) and London Gateway (UK).

Asia Pacific and Indian Subcontinent

Markets conditions in the Asia Pacific and Indian Subcontinent region were generally positive. Volume growth in the region of 97.5 per cent was boosted by the consolidation of Pusan (South Korea) and the like-for-like growth of 2.9 per cent is a better reflection of the performance.Revenue growth of 51.4 per cent to $335 million was again due to the consolidation of Pusan and on a like-for-like basis revenue grew 6.5 per cent ahead of volume growth due to strong containerized other revenue growth of 8.2 per cent and non-containerized revenue growth of 6.9 per cent. Share of profit from equity-accounted investees stayed broadly flat on a reported basis at $61 million compared to $62 million in 1H2016 but grew 17.6 per cent on a like-for-like basis due to improved contribution from Manila (Philippines) and Qingdao (China).  Adjusted  Ebitda of $229 million was 40.4 per cent higher than the same period last year on a reported basis and 16.1 per cent on a like-for-like basis while the like-for-like adjusted  Ebitda margin stood at 69.0 per cent.Capital expenditure in this region during the year was $30 million, mainly focused on Pusan (South Korea) and JNP Mumbai (India).

Australia and Americas

Market conditions have improved and reported volumes grew by 15.2 per cent, benefiting from stronger volumes in the Americas. Revenues grew by 9.7 per cent to $363 million. Profit from equity-accounted investees recorded a loss of $10 million due to unfavourable foreign exchange movements in Brazil, however, on a like-for-like basis, JV income was up by 40.5 per cent.Adjusted  Ebitda was $140 million, down 8.0 per cent mainly due to unfavourable foreign exchange movements in Brazil. However, like-for-like revenue growth at constant currency was up 6.9 per cent and like-for-like adjusted  Ebitda grew by 5.4 per cent, reflecting a stable performance in the region.We invested $71 million capital expenditure in our terminals across this region during the year mainly focused in Prince Rupert (Canada).

Cash Flow and Balance Sheet

Cash generation remained strong with cash from operations standing at $1,009 million for 1H2017. Our capital expenditure reached $595 million across the portfolio as we invested in new capacity in Jebel Ali port (UAE), London Gateway (UK) and Prince Rupert (Canada). Gross debt fell to $7,547 million in 1H2017 compared to $7,618 million at 31 December 2016. Net debt was also lower at $5,916 million compared to $6,319 million at year end as the cash on the balance sheet in 1H2017 of $1,631 million was higher due to the partial monetisation of our Canadian assets as part of the CDPQ investment partnership. Our balance sheet shows that leverage (net debt to annualized adjusted  Ebitda) decreased to 2.6 times from 2.8 times at 31 December 2016. Overall, the balance sheet remains strong with ongoing strong cash generation and plenty of headroom and flexibility to add to our portfolio should favourable assets become available at attractive prices.

Capital Expenditure

Consolidated capital expenditure in the first half of 2017 was $595 million, with maintenance capital expenditure of $77 million. We expect the full year 2017 capital expenditure to remain at $1.2 billion and we look forward to adding further capacity to Jebel Ali port (UAE), Prince Rupert (Canada) and Berbera (Somaliland). Net finance costs before separately disclosed items, Net finance cost for the six months was higher than the prior period at $166 million (1H2016: $142 million) mainly due to lower foreign exchange gains.


DP World is not subject to income tax on its UAE operations. The tax expense relates to the tax payable on the profit earned by overseas subsidiaries, as adjusted in accordance with the taxation laws and regulations of the countries in which they operate. For the first six months of the year, DP World’s income tax expense before separately disclosed items was $76 million (1H2016: $91 million).Profit attributable to non-controlling interests (minority interest)
Profit attributable to non-controlling interests (minority interest) before separately disclosed items was $76 million, (1H2016: $65 million) ahead of the comparable period due to a generally stronger performance in Africa, Asia Pacific and the Americas.

Separately disclosed items

 DP World reported a loss in separately disclosed items of $63 million, mainly representing the change in the fair value of the convertible bond option.

Earnings per share (EPS)

As at 30 June 2017, basic EPS after separately disclosed items was 65.5 US cents. Basic EPS before separately disclosed items was 73.0 US cents, representing a 0.3 per cent decline on the prior year.


It is our current dividend policy that not less than 20 per cent of our profit for the year attributable to owners of the Company (after separately disclosed items) will be distributed as dividends. Dividends in respect of the full year 2017 will be proposed at the time of the preliminary results in March 2018.

By Rajive Singh