DP World announces $1.13 billion profits for 2016, up 28% year-on

DP World announces $1.13 billion profits for 2016, up 28% year-on

The group today reported growth in volumes, revenues and EBITDA in its full-year figures.

- Total containerized revenue grew by 3.8% on a reported basis and 2.3% on a like-for-like basis as containerized Other revenue was up 6.1% on a reported basis and 5.1% on a like-for-like basis.

Mr Wai said that DP World beat sales and earnings forecasts, which he attributed to a stronger performance from the Jebel Ali free zone, acquired by DP World in 2014.

- Leverage (Net Debt to adjusted EBITDA) decreased to 2.8 times from 3.2 times in 2015.

Some $1.2bn was raised in a new seven-year Sukuk transaction at significantly improved terms, while refinancing $1.1bn of the existing 2017 Sukuk was achieved through a tender offer and extending the debt maturity profile.

An additional £650m was raised through 20- and 30-year multi tranche term financing placed with pension funds, insurance companies and financial institutions for London Gateway Port.

Over 2016, DP World said it has reduced financing costs and lessened its refinancing risks, through a number of measures.

- Ordinary dividend increased by 26.7% to 38 USA cents to reflect growth in 2016 earnings.

DP World is planning to spend up to $1.2bn on its port network this year, expanding capacity at Jebel Ali in Dubai, London Gateway, Dakar (Senegal), Port Rupert (Canada) and Berbera (Somaliland). This is a slight decline on the $1.3bn spent in 2016, during which gross capacity increased by five million twenty-foot equivalent units (TEU) to 85 million TEU.

Although DP World had previously sold a stake in a container terminal in Russian Federation in 2012, Mr Wai said a recent thawing in global diplomatic relations with Russian Federation had strengthened cargo volumes previously affected by sanctions.

Mr bin Sulayem said that both 2014 and 2015 represented sizeable years of investment for DP World, "but our return on capital employed of over 9.5 per cent in 2016, compared with 7.9 per cent in 2015, [showed] that our investments have delivered results". "This is pleasing given the significant challenges parts of our portfolio have faced, and once again demonstrates the resilient nature of our diversified portfolio", he said.

"Disciplined investment throughout the economic cycle has been one of the keys to delivering consistent growth and in 2016, we invested $1,298 million across our portfolio in markets with strong demand and supply dynamics", he stated.

Addressing the first quarter of 2017 and the next nine months, he added: "While 2017 is expected to be another challenging year for global trade, we have made an encouraging start to the year and we expect to continue to deliver ahead-of-market volume growth".

"The board of DP World recommends increasing the dividend by 26.7 per cent to $315.4 million, or 38.0 U.S. cents per share, reflecting the strong earnings growth in the year. The board is confident of the company's ability to continue to generate cash and support our future growth whilst maintaining a consistent dividend payout", he stated.

"Overall, we continue to believe that a portfolio which has a 70% exposure to origin and destination cargo and 75% exposure to faster growing markets will enable us to deliver enhanced shareholder value over the long term", Bin Sulayem commented.