DP World, the global ports operator based in Dubai, delivered a strong financial performance last year, boosted by the proceeds of the sale of its Australian business, despite challenging economic conditions towards the end of the year.
Profits for the year came in at US$751 million (Dh2.75 billion), compared with $451m in 2010, a 67 per cent rise. But even after stripping out the cash from the Australian deal, and other items such as joint venture profits, earnings of $459m were significantly better than the previous $374m and ahead of most market expectations.
The shares recovered from an early fall on the Nasdaq Dubai to close 0.17 per cent ahead at $11.6. The progress continued in London, where the shares are also traded, ahead 0.35 per cent at £7.20.
After taking account of the Australian sale, revenue fell slightly to $2.97bn, but the underlying performance showed a 14 per cent increase. Gross throughput, measured by traffic in twenty foot equivalent containers (TEU), was 10 per cent ahead at 54.7 million TEUs.
The dividend is increased from 17 cents to 24 cents. DP World is 80 per cent owned by the Dubai Government via the Dubai World conglomerate.
"DP World delivered an excellent improvement in profitability during 2011 to $751m after separately disclosed items," said Sultan Ahmed bin Sulayem, the DP World chairman. "This improvement in profitability is a reflection of our strategy, which sees us focus on the faster-growing emerging markets and more profitable origin and destination and gateway cargo."
Mr Sulayem ruled out any further sales of equity by Dubai World in the near future. "A 20 per cent float is the appropriate level and that remains the position at this time," he said.
"2011 has been another good year for DP World with the second half of the year delivering a better performance than the first half," said Mohammed Sharaf, the DP World chief executive. "This improved performance was achieved despite a deteriorating global economic backdrop in the second half." He added that global macro-economic uncertainty continued into this year.
"Things are still unclear, especially in Europe," he said.
Both Mr Sharaf and Mr Sulayem said it was impossible to predict the economic effect of any escalation in United States sanctions against Iran.
"We do not believe it is technically possible for Iran to close the Strait of Hormuz," Mr Sulayem said.
Mr Sharaf said the flagship terminal at Jebel Ali in Dubai continued to deliver sustainable growth.
Roger Elliott, an analyst at Citigroup, said the DP World share valuation, trading at a discount to other ports groups in the emerging markets, was "highly attractive".
"We believe the discount is due to the investor nerves over prospects for the main east-west trades and ignoring the strength of minor trades [Asia, Middle East, Africa, Latin America], which are key to DP World profits, and to geopolitical fears."