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09 December 2023

Dubai World sees improving profitability

DP World is a profitable unit of Dubai World (FILE)

By Reuters

Dubai World sees improving profitability

‘Strong expectation of achieving profitability goals,’ says Dubai conglomerate

Dubai World, the emirate's flagship conglomerate that has restructured $25 billion in debt, expects recovery in its businesses such as ports and free trade zones, a statement said.

"The board of directors voiced confidence in Dubai World's ability to achieve significant recovery in critical areas ... including ports, dry docks and free zones ... and has strong expectation of achieving profitability goals," the Dubai government said on Monday.

The board passed a 2011-12 budget for Dubai World and its subsidiaries that aims to "strengthen the overall financial performance and raise the efficiency of its units to achieve high profitability in the coming period", it said, without giving budget figures.

Dubai World units include DP World, which moved to cut its debt and focus on emerging markets by selling 75 per cent of its Australian port operations for $1.5 billion in December.

DP World, considered one of the more profitable units of debt-laden Dubai World, had a first-half profit from continuing operations of $206 million, up 10 per cent on a recovery in container volumes. 

Kenneth Moelis, chief executive of investment bank Moelis & Company, which advised the Dubai government on the $25 billion debt restructuring of conglomerate Dubai World, said in a separate interview that Dubai World would sell asset when valuations are back, unlikly in 2011.

"There is nothing unique about 2011 in regard to asset sales - obviously, over the next eight years, there will be asset sales," said Sasso, adding that companies are focussing on how to maximise values before any sales.