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DP World's London Gateway, a container port on the Thames Estuary, is set to open in the fourth quarter. Stephen Lock for The National
DP World's London Gateway, a container port on the Thames Estuary, is set to open in the fourth quarter. Stephen Lock for The National

DP World will spend Dh11bn to lift capacity

DP World, the world's third biggest ports operator, plans to spend US$3 billion this year and next on extending capacity after announcing a 21 per cent rise in profits last year.

DP World plans to spend nearly US$3 billion (Dh11.01bn) this year and next on extending terminal capacity as the ports operator seeks to tap new markets and cater to larger ships.

The Dubai-based company yesterday posted a 21 per cent rise in profits last year to $555 million, up from $459m a year earlier. DP World made $249m from asset sales in Australia, Europe and the Middle East.

Earlier this month, DP World said it was selling its assets in two container terminals and a logistics centre in Hong Kong for $742m.

Part of the cash will be recycled into 11 new developments and expansion projects as it focuses its strength on fast-growing markets.

"This year, we have continued to actively manage our portfolio to maximum advantage, divesting non-core or low-return assets," said the DP World chairman Sultan bin Sulayem. "This has enabled us to move capital into those markets where we see more profitable returns whilst strengthening our capital base."

Despite a tricky few years for the shipping industry caused by the global financial crisis, DP World has grown to capture a 10 per cent market share of global ports operations.

Its expansion will continue this year with the opening in a few months of Embraport in Santos, Brazil. Designed to serve Sao Paulo, Brazil's most populous city, phase one of the project will involve a capacity of 1 million standard container units, with phase two adding a further 1.5 million units.

It is also building out its home port of Jebel Ali, where it will add 1 million units of capacity at terminal 2, due to open this year, and a further 4 million units at terminal 3, opening next year.

But its focus is not only on emerging markets.

London Gateway, the container port on the Thames Estuary, is set to open in the fourth quarter of the year. It will have an initial capacity of 1.6 million units.

The expansion allows DP World to accommodate the ever-larger super-vessels taking to the water.

"We have 10 ports capable of handling up to 18,000 [unit] mega vessels," said the DP World chief executive Mohammed Sharaf.

New capacity is also planned in the next few years in Senegal, Egypt, India, Turkey, France and the Netherlands. The company's consolidated capacity was 34.7 million units at the end of last year, a figure it hopes will rise to 46.1 million by 2015.

The capital spending this year and next year would amount to nearly $3bn, said the chief financial officer Yuvraj Narayan. The company had $1.8bn on its balance sheet currently, he said.

Mr Narayan said he expected the trend of the company's revenue outstripping growth in container volumes to continue.

Gross container volumes rose 2 per cent to 56 million units last year.

Operating performance in the company's markets in the first two months of the year had been "consistent" with those experienced at the end of last year and the economic environment continued to remain "uncertain", said Mr Sharaf.

DP World's sale of its Hong Kong assets was the latest of several divestments by the company after its exit from Adelaide, Australia, more than two years ago.

Stocks in the company, one of the more profitable arms of the government-controlled Dubai World, rose 0.07 per cent yesterday to close at $14.12 on Nasdaq Dubai.



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