DP World aims to recycle cash from asset sales into emerging markets such as Latin America and Africa as it readies for a rebound in container volumes this year.
It follows a year in which the company grappled with turbulent trade flows caused by instability in the global economy.
The world’s fourth-largest port operator yesterday reported net profit for last year of US$604 million, 10.9 per cent more than its net profit of $545m in 2012.
But when non-recurring, separately disclosed items are included, the company's profit fell 13.4 per cent to $640m from the year-earlier figure of $738m. DP World this year disclosed items of $48m, mostly relating to a $158m profit on the sale of businesses and a $99m impairment of assets. The company did not provide details.
Last year’s results, the company said, were achieved against a backdrop of “challenging” conditions in Asia-Pacific and the Indian subcontinent; conditions were mixed in the Middle East, Europe and Africa.
Revenues dipped 1.5 per cent to $3.07bn. Consolidated container volumes fell 3.8 per cent to 26.1 million standard container units, from 27.1m a year before.
Global trade volumes are expected to grow by 4.5 per cent this year, according to the World Trade Organisation, the sharpest rate since 2011.
As DP World seeks to capitalise on the more buoyant outlook, it is looking to re-invest some of the cash freed up from asset sales into new markets.
“We continue to manage our portfolio actively, having monetised some of our assets in Hong Kong this year, and we expect to recycle this cash into projects that will return higher growth on our capital employed,” said the DP World chief executive, Mohammed Sharaf.
“We have made an encouraging start to 2014, and for the year as a whole and beyond we expect to see a return to normalised volume growth driven by the addition of new capacity in our portfolio and a gradually improving macro environment.”
DP World in March last year said it was selling 75 per cent of its interest in CSX World Terminals Hong Kong, which operates Berth 3 of the Kwai Chung Container and ATL Logistics Centre Hong Kong. It said it was also selling its full stake in Asia Container Terminals Holdings, which operates another container terminal. It achieved a profit of $742m on the sale.
Latin America and Africa were among the markets where DP World would consider recycling the capital because of their higher growth opportunities, said the chairman Sultan Ahmed bin Sulayem.
The company has held talks with the Ecuadorean government about investing in a port project, he said.
It is earmarking about $1.95bn in capital expenditure during the year, up from $1.1bn last year.
DP World has sought to gradually strengthen its focus on emerging markets to withstand more sluggish prospects in developed markets. Between 2012 and last year, it sold stakes in the Russian container terminal Vostochnaya Stevedoring, the British-based Tilbury Container Services as well as operations in Belgium.
Last year, DP World opened Embraport in Santos, Brazil, adding an extra capacity of 1 million containers. It also added 1 million containers of capacity in Jebel Ali, which will be further swelled this year with the opening of terminal three.
tarnold@thenational.ae
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