x Abu Dhabi, UAESunday 23 July 2017

DP World ports suffer amid decline in volume

Challenging market conditions meant that the amount of goods shipped through ports owned by the world's third largest ports operator DP World said fell 5.8 per cent during the first six months of the year.

The Vallarpadam Container Terminal owned and operated by DP World in Kochi, Kerala. Container volumes in India were down in the first half. Simon de Trey-White for The National
The Vallarpadam Container Terminal owned and operated by DP World in Kochi, Kerala. Container volumes in India were down in the first half. Simon de Trey-White for The National

DP World said that challenging market conditions meant the amount of goods shipped through its ports fell 5.8 per cent during the first six months of the year.

The government-controlled company, which is the world's third- largest ports operator, said yesterday that its terminals around the world handled 26.6 million standard container units of cargo, a significant decline on the same period the previous year as volumes fell in Europe, Asia and the Middle East.

Global container operators are battling in a depressed market and DP World said although trade had improved slightly in the three months from April, the difficult market was set to continue.

"Despite a softer first half when compared with the same period last year, we saw an encouraging uplift in containers handled during the second quarter," said the group chief executive Mohammed Sharaf. "This uplift, while positive, has occurred in challenging market conditions which we anticipate will continue into the second half.

"We maintain expectations of like for like container throughput in line with 2012 with our portfolio positioned toward the faster-growing emerging markets and stable origin and destination cargo."

The company sold assets in Tilbury in east England, Adelaide, Aden, and Vostochny in Russia last year and this year it has disposed of assets in two container terminals and a logistics centre in Hong Kong.

When these divestments were taken into consideration, like for like volumes were down 2.1 per cent, the company said.

DP World, which is controlled by the conglomerate Dubai World, said container port trade in the UAE remained "relatively flat" compared with the same period last year, handling 6.5 million cargo units.

Across Europe, the Middle East and Africa, DP World's ports handled 12.8 million cargo units during the six months, down 5.7 per cent on last year and 3.9 per cent on a like for like basis.

The group said the performance was mitigated by an improvement in trade volumes in the Americas and Australia that had increased 2.7 per cent on a like for like basis.

Despite a dip in volumes in DP World's Asian and Indian operations, the company said it would continue to focus on handling a smaller number of higher margin containers to improve returns.

Sultan Ahmed bin Sulayem, DP World's chairman, said the company remained confident about the long-term outlook and was on track to bring on stream new operations in the London Gateway and Santos in Brazil during the second half of the year.

Last year, DP World handled more than 56 million standard container units, with capacity expected to rise to more than 100 million by 2020.

In June, DP World inaugurated an expansion to Terminal 2 in Jebel Ali ahead of the completion of its third terminal. The upgrade expands the capacity of the port by an additional 1 million standard container units to a total of 15 million units per year. Once Terminal 3 is completed next year, Jebel Ali will be able to handle 19 million units annually.

 

lbarnard@thenational.ae