x Abu Dhabi, UAE Thursday 20 July 2017

Nomura lifts outlook for profit at DP World

DP World has shown all of its global ports to be capable of weathering the heavy seas of economic uncertainty.

DP World's ports are showing signs of weathering the heavy seas of economic uncertainty.
DP World's ports are showing signs of weathering the heavy seas of economic uncertainty.

Any port in a storm, the old maritime saying goes.

But DP World has shown all of its global ports to be capable of weathering the heavy seas of economic uncertainty.

Since the company reported its half-year figures last month, showing a surge in net profit, several leading investment banks have upgraded their forecasts for DP World's trading and financial outlook.

The company reported profit of US$281 million after tax before separately disclosed items, 36 per cent ahead of the same period last year.

The Japanese investment bank Nomura has become the latest to respond, raising DP World's earnings forecast by some 6 per cent between this year and 2013. It said first-half results were well ahead of its conservative estimates.

"In aggregate, we have been slightly more cautious on the volume outlook but have taken note of the strong performance on margins," the bank said in a research note.

The bank maintained a "buy" rating on the stock. It said the stock was oversold.

DP World's increased exposure to emerging markets, which account for 86 per cent of the company's overall business, and the impetus provided by new terminal openings in generating growth created a more positive outlook, Nomura said.

Deutsche Bank, EFG-Hermes and National Bank of Kuwait have lifted their rating on DP World to "buy".

Goldman Sachs has retained a "neutral" rating on the stock but forecasts the potential for a 33 per cent rise in the shares over the next 12 months.

Shareholders have watched the value of their investment drop by more than 20 per cent since the shares were floated on the London Stock Exchange in June.

The stock was trading flat at 645 pence yesterday afternoon.

 

tarnold@thenational.ae