DP World, the Dubai World- controlled ports operator, forecast full-year gross profit to be 'in line with expectations' after a 10 per cent rise in container volumes last year.
Rising tide of shipping business swells profits at Dubai's DP World
DP World, the Dubai World-controlled ports operator, forecast full-year gross profit to be "in line with expectations" after a 10 per cent rise in container volumes last year.
The company handled 54.7 million twenty-foot equivalent container units at its ports last year compared with 49.6 million TEUs a year earlier, it said in a statement to Nasdaq Dubai today. Terminals the company consolidates for accounting purposes handled 27.5 million TEUs, while like-for-like growth for that period was 8 per cent.
DP World, which operates more than 60 terminals across six continents, is expanding operations in China, India and the Middle East as it seeks to boost capacity to 100 million TEU by 2020, according to its website. The company said in December it will invest $850 million in the next three years to expand capacity at its Jebel Ali port in Dubai.
"Whilst uncertainty continues to affect the global economy, our business is still performing well," said Chief Executive Officer Mohammed Sharaf. "We made good progress through the fourth quarter of 2011 and we will achieve 2011 full-year EBITDA in line with expectations. Lower-than-expected net financing charges will benefit reported profit before tax.
The company, the world's fourth-largest port operator, in August posted a better-than-expected jump in first-half profit as volume increased and the company booked a gain from selling its Australian unit. DP World, rated the second-highest non- investment grade by Standard & Poor's, has $7.2 billion of debt and interest payments outstanding, according to data compiled by Bloomberg.
While "uncertainty remains as we enter 2012, we continue to concentrate on delivering an improved operational and financial performance over 2011," Mr Sharaf said.
DP World agreed a 20-year financing with a group of international banks to fund its London Gateway deep-sea port. The company, which said it will invest an additional $1 billion in the project over the next three years, will use an equal mix of debt and equity to finance it and plans to draw down on the debt by mid-2012 after completing equity investments, it said.
DP World shares dropped 1.9 per cent to $10.76 at 10:38 a.m in Dubai. The stock has gained 11 percent this year.
Bloomberg News // Stefania Bianchi