Surging trade during the first half of the year provided a boost to profits at DP World, the ports operator based in Dubai. But the flagging strength of the global recovery is still weighing on investors' minds as the company posts strongly improved results.
Net income for the first half of the year increased fourfold to US$705.3 million from $176.6m in the same period last year. Excluding the gains from the sale of its five Australian container terminals and including minority interests, profit rose 36 per cent to $281m. Analysts polled by Bloomberg News had expected $187m.
But the company's stock on the Nasdaq Dubai exchange fell 1.86 per cent to $10.55 per share, having initially jumped up to $11 a share.
Having initially sent the FTSE Nasdaq Dubai UAE 20 index sharply higher, DP World's reversal caused the gauge to slump, ending the day flat at 1,505.98 points.
DP World has embedded itself within global trade, making geographic diversification one of its strengths. But analysts pointed to the weakening global recovery as a major potential worry for investors.
However, trade in DP World's Dubai heartland has recovered strongly, and compared with international transportation giants such as UPS, FedEx and AP-Moller Maersk, DP World has outperformed for much of the year so far.
DP World's net debt amounts to $3.74 billion. The company is confident in its ability to manage its upcoming debt maturities following the sale of its Australian operations for $435.5m, which have left it with $4.1bn of cash on its balance sheet.
Revenue grew by 3 per cent to $1.5bn during the first half of the year, slower than would have been tallied had the company not sold its Australian assets.
But a 10 per cent increase in non-container revenue was one clear sign of growth, said Rami Sidani, the head of Middle East and North Africa region portfolio management at Schroders, the international investment house.
"Non-container shipments, for the first time since the Dubai crisis, have started to rebound," Mr Sidani said.