x Abu Dhabi, UAESaturday 22 July 2017

DP World sails away from Aden

DP World shares received a boost yesterday after the world's third-largest port operator said it was exiting its Aden port investment in Yemen and selling non-core operations in Belgium.

DP World sold its 50 per cent stake in the company managing the container terminal of the port of Aden to its joint venture partner, the Yemen Gulf of Aden Ports Corporation. Khaled Abdullah / Reuters
DP World sold its 50 per cent stake in the company managing the container terminal of the port of Aden to its joint venture partner, the Yemen Gulf of Aden Ports Corporation. Khaled Abdullah / Reuters

DP World shares received a boost yesterday after the world's third-largest port operator said it was exiting its Aden port investment in Yemen and selling non-core operations in Belgium.

It sold its 50 per cent stake in the company managing the container terminal of the port of Aden to its joint venture partner, the Yemen Gulf of Aden Ports Corporation.

The exit brings to a close an increasingly strained relationship between DP World and Yemen's post-revolutionary government over the management of the port.

"The agreement reached protects the interests of DP World, its partners and the Yemeni parties who will run and operate a terminal boosted by two new Liebherr Super Post-Panamax quay cranes," DP World said.

"We believe that the work we have started will go a long way in further supporting the facility's position."

DP World said it was also selling all 60 per cent of its shares, valued at US$61 million (Dh224.05m), in its dry-bulk business in Antwerp to a company known as Orienta.

Investors in DP World reacted positively to both announcements. Its stock value rose 1 per cent on the Nasdaq Dubai to $11.20 during afternoon trading.

Shares in the company's listing on the London Stock Exchange moved 2.5 per cent higher to 705 pence in afternoon trading.

"These are two fairly small disposals, which DP World will not be unhappy about," said an equity analyst who asked to remain anonymous.

"In theory, Aden is a fantastic location but political reasons have made it a tricky port to manage and bear in mind that DP World has a large investment in Djibouti, which covers the same transshipment route."

Neither divestment is expected to radically change DP World's recent resilient performance in the face of headwinds battering the global shipping industry.

Stronger container volume growth than its rivals in the first half of the year helped the firm capture a larger market share of the container industry, its core operation.

The decision to terminate its Aden operations comes four years into a 30-year management deal signed under Ali Abdullah Saleh, the Yemeni president who stepped aside in February after more than three decades in power. Following that, DP World's future involvement in the port became more uncertain.

In June, the country's anti-corruption body called for the renegotiation of the contract to operate the Aden container terminal and the nearby Ma'alla container terminal. DP World rejected claims by the body that it had broken its contractual obligations.

The restructuring of its Antwerp operations forms part of a company strategy to dispose of non-core assets in developed markets.

"This sale forms part of a restructure of our businesses here in Antwerp and will allow us to strategically focus on our expertise in excellent container terminal management and technical capability in which we have extensive experience," said Rob Harrison, the managing director of DP World's businesses in Belgium.

DP World Breakbulk was formed as a joint venture in 2007 and operates a general cargo terminal at the Port of Antwerp.

DP World last year sold its Australian operations for $1.5 billion to the private equity firm Citi Infrastructure Investors.

tarnold@thenational.ae