Dubai World subsidiary Dubai Ports World said it will expand its global network of terminals as emerging markets trade boosted its financial results for the first half of 2008.
The company is considering more than 20 projects worldwide for acquisition and joint ventures in the coming years, backed by its strong growth, top executives said on a conference call after the port operator announced its financial results. DP World saw after tax profits from continuing operations more than double to $287 million (Dh1.05 billion) in the first six months of this year as its 44 marine terminals reported a 21 per cent throughput growth to 13.6m TEUs (twenty-foot equivalent units).
The company is also looking to expand its operations in the US, despite the current slowdown in demand.
The company's revenue for the period to June rose 32 per cent to nearly $1.6bn, with EBITDA (earnings before interest, taxes, depreciation and amortisation) up 44 per cent to $652m on increasing margins, from 37.5 per cent to 40.8 per cent year on year.
The company's revenue surged by 25 per cent to $1.6bn, from $1.28bn previously, with its ports in Europe, Middle East and Africa contributing, $943m to the total revenue, compared to $654m in 2007.
"These results are particularly pleasing given the more challenging operating environment in the first half of this year," said DP World Chairman Sultan Ahmed bin Sulayem.
"DP World remains committed to expanding its already strong presence in the faster growing emerging economies together with the more mature economies where capacity is constrained," he said.
Almost two-thirds of the 32 per cent increase in revenue is derived from an increase in stevedoring revenue driven by increased volumes and tariff increases, as well as additional revenues from ancillary container-related services.
Container-related revenues continue to represent 75 per cent of the company's total revenue and during this period, the Dubai-based company has seen its revenue per TEU increase as it handles a greater volume of higher revenue cargo.
Jebel Ali port increased volumes by 22 per cent as it continued to improve utilisation rates following the expansion in the latter half of last year. The port will continue to roll out the second phase of new capacity, totalling three million TEUs, towards the end of 2008, taking the capacity at Jebel Ali to 14 million TEUs.
DP World Chief Executive Mohammed Sharaf told Emirates Business that the company is assessing between 20 to 25 projects worldwide with plans to make acquisitions or forge joint ventures.
He pointed out that DP World is interested in expanding its operations in the US, but only when the time is right for the company.
"We are continuing to look for every opportunity that comes our way.
We definitely plan to increase our operations in the US, but we want to do it strategically and only when the time is right for us to do so," said Sharaf.
Revenues from DP World's consolidated ports in the Americas, Australia and New Zealand contributed only 14 per cent to the total revenues at $387m compared with $338m in the same period in 2007. Sharaf said the company was currently operating in a more challenging global financial and economic environment due to the slowdown in volume growth in the Asia-Pacific region.
"Our business performed very well in the first half of 2008 despite a deteriorating global financial and economic background and these uncertainties remain. In the past few months the industry has reported early indications of weakening growth in some markets, but our business has continued to perform ahead of the market,"
He said that he expects DP World to outperform the entire industry growth for this year expected to be between nine to 10 per cent.
He added that the strong volumes from its 25 consolidated terminals reflect the addition of new terminals in the Middle East, Europe and Africa region as well as extremely strong growth in the Middle East, which is benefiting from the company's investment in additional capacity to meet the increasing demand from origin and destination cargo in the region. The company's capital expenditure (capex) spent in region was $444m, predominately focussing on the expansion of Jebel Ali and on the new terminals of Sokhna (Egypt) and Dakar (Senegal), which have shown early signs of enhanced productivity from the investment.
At year end the company reported $3bn cash on the balance sheet, the majority of which has now been invested in expanding its portfolio with the acquisition of Sokhna in Egypt and investing in its existing terminals at Chennai, India and Karachi, Pakistan.
DP World also said that it had no plans of selling off any of its existing holdings.