DP World had a 7 per cent drop in container volumes in the first three months of this year, the Dubai-based global ports operator said.
Container volumes slide for DP World
DP World had a 7 per cent drop in container volumes in the first three months of this year, the global ports operator said yesterday.
Gross volumes for Europe, the Middle East and Africa were worst hit, falling by 8.7 per cent, and UAE volumes were down 5 per cent.
The announcement comes at a time when as global container operators battle a depressed market.
"Operating conditions in the first quarter of 2013 have remained challenging and have been broadly similar to those experienced in the fourth quarter of last year," Sultan Ahmed bin Sulayem, the DP World chairman, told the company's annual meeting.
His comments follow last month's news that the Dubai-based operator had reported a record rise in revenues and profits for last year, helped by the sale of non-core assets.
"DP World handled 12.8 million TEU [standard container units] across its global portfolio in the first three months. While this was 7 per cent lower than the same period last year, when adjusted for the divestments and monetisation across our portfolio, the decline was 3.5 per cent on a like-for-like basis," Mr bin Sulayem said.
"This decline in gross container volume was as a result of lower volumes in the Asia Pacific and Indian subcontinent region and the Europe, Middle East and Africa region. In the Asia Pacific and Indian subcontinent region we continue to focus on handling a smaller number of higher margin containers.
"In the Europe, Middle East and Africa region, our European and Middle East businesses in particular continue to operate in a challenging macro environment. Within this region, our UAE facilities handled 3.1 million TEU. These volume declines were mitigated by a better performance from our terminals in the Americas and Australia region."
After hearing Mr bin Sulayem's announcement, the AGM voted in favour of the reappointment of all eight directors of the DP World board and approved a dividend of 24 US cents per share for the full year 2012, to be paid on April 30 2013. The total dividend distribution will be US$199 million.
The shipping consultant Drewry's Container Forecaster report said that, "managing month-to-month … is now a constant battle for container operators … in the current weak demand environment."
DP World said its portfolio of consolidated terminals had handled 6.2 million TEU during the first quarter of this year, a decline of 6.4 per cent when compared with the same period last year.
On a like-for-like basis, which adjusts for the sales of the terminals at Tilbury in east England, Adelaide, Aden and Vostochny in Russia last year and Hong Kong this year, consolidated volumes declined 5.1 per cent.
"Despite a continuation of subdued markets at the start of 2013 and notwithstanding the challenging macroeconomic conditions, we still expect like-for-like container throughput in line with 2012 with our portfolio focused on the faster-growing emerging markets and more stable origin and destination cargo," said Mr bin Sulayem.
"We are confident about the long-term outlook of our industry and our growth prospects. With this in mind, we remain focused on developing the significant new capacity which is due to be operational later this year."
The 2012 sales involved 1 million TEU disappearing from DP World's capacity in Europe, the Middle East and Africa, and 0.3 million TEU in the Americas and Australia region.
During the first quarter of this year DP World divested 1.6 million TEU from the Asia Pacific and Indian subcontinent regions. The company, which has a portfolio of more than 65 marine terminals across the world, announced last month a 21 per cent rise in profits, up from $459 million to $555m year-over-year, and revenues up a record 5 per cent to $3.1 billion.
"Delivering this improvement in profits during what has been a challenging operating environment shows that our portfolio is focused on the right markets, and on delivering the right operations and service to our customers," Mr bin Sulayem said at the time. "We have continued to actively manage our portfolio to maximum advantage."
Last year, DP World handled more than 56 million TEU, with capacity expected to rise to more than 100 million TEU by 2020.