x Abu Dhabi, UAETuesday 25 July 2017

Recovery in global trade boosts DP World volumes 14%

Dubai conglomerate reports as much as 33 per cent growth in some port operations as container volumes surge back to peaks

Container volumes for DP World surged 14 per cent across its global network of 50 terminals in the third quarter, in a sign the global economy is continuing to strengthen despite rising unemployment in Europe and flagging consumer confidence in the US.

DP World, the world's third-largest ports company, which is based in Dubai, handled 13 million containers, up from 11.4 million over the same period last year. The biggest gains were seen in Australia and the Americas, where volumes climbed 33 per cent, to 1.6 million containers, from the same period last year.

Mohammed Sharaf, the chief executive of DP World, said its container volumes were now back in line with 2008 peak levels. "Many of our regions are delivering double-digit growth over the third quarter last year," Mr Sharaf said.

For its consolidated ports, volumes grew 8 per cent to 7.3 million compared with the third quarter last year. Analysts welcomed yesterday's announcement, which marks the first time DP World has reported quarterly traffic statistics rather than half-yearly.

Kareem Murad, an analyst at Shuaa Capital in Dubai, said: "The higher than expected results reinforce our positive outlook on DP World and warrant an upward revision of our estimates."

Container handling is a keenly watched indicator of world trade and the global economy. This month the IMF released an update on its global outlook, predicting a 4.8 per cent growth in the global economy this year, followed by 4.2 per cent next year.

Emerging and developing economies will grow three times faster than mature ones, the IMF says.

It said: "Thus far, economic recovery is proceeding broadly as expected, although downside risks remain elevated," warning of a temporary slowdown in the rest of this year and the first half of next.

DP World said volumes across its Indian and Asia-Pacific region grew by 18.3 per cent to 5.8 million containers. Europe, the Middle East and Africa reported slower growth in container handling, up 7.5 per cent to 5.7 million containers.

The company has one of the most geographically diversified portfolios among the world's largest ports companies.

Last year it surpassed APM Terminals, the Netherlands-based company owned by the AP Moller-Maersk Group, to take the third spot in terms of containers handled. It has a 6.7 per cent market share worldwide, according to Drewry Shipping Consultants.

The brightening prospects in emerging economies contrast starkly with the economic picture in Europe and the US. Unemployment and austerity continue to dog European fortunes while Michael Duke, the chief executive of Wal-Mart, the world's biggest retailer, said yesterday that US consumer confidence remains weak.

DP World is one of the most profitable concerns under the umbrella of its cash-strapped parent Dubai World, and had US$580 million (Dh2.13 billion) in earnings before interest, depreciation and taxes in the first half of this year.

In the UAE, DP World manages ports in Dubai, Abu Dhabi and Fujairah. The growth in container handling for these terminals was slower than the global average, with a 4 per cent gain to 3 million on the same period last year, which the company said was "particularly pleasing".

The IMF estimates Dubai's GDP will grow by 0.5 per cent this year.

igale@thenational.ae