Dubai port firm profits rise 22 percent in 2010

AP , Wednesday 23 Mar 2011

Shipping success in key location suggests resurgence in worldwide trade

Port operator DP World posted a 22 per cent jump in annual profits Wednesday, helped by cost-cutting efforts and a rebound in shipping fueled by the improving global economy.

The Dubai-based company generates most of its business by loading and unloading shipping containers at 49 sea cargo terminals around the world. It said its 2010 profit rose to US$451.1 million, up from $370.1m a year earlier.

The growth was even larger once one-time gains and charges were stripped out. The company's adjusted profit rose 35 per cent to $450.1m.

"Almost all of our container terminals around the world are back at or ahead of volumes last seen in 2008, which was a peak year for the global container terminal industry," chairman Sultan Ahmed bin Sulayem said.

DP World is the world's third largest seaport operator, and its results provide a useful snapshot of global trade levels. It runs cargo terminals on six continents, including the Middle East's busiest in Dubai. It is primarily focused on fast-growing markets in the developing world.

Revenue increased nearly nine per cent to $3.19 billion in 2010.

DP World said business accelerated in the second half as increased container volumes and a jump in other cargo kept its cranes busier than earlier in the year. It has said its ports handled the equivalent of 49.6 million standard 20-foot cargo containers in 2010, up 14 per cent.

Business continues to improve so far this year, including in DP World's home market in the United Arab Emirates, the company said. While it's too early to say how much trade will strengthen, company officials say they expect further growth in 2011.

"Our expectation is 2011 will look to (have) a very positive outcome, higher than 2010," Chief Financial Officer Yuvraj Narayan told reporters.

CEO Mohammed Sharaf said the company has not seen any major effect on its business so far from the unrest in the Arab world. Besides the UAE, DP World has operations in Algeria, Egypt, Saudi Arabia and Yemen.

DP World is gearing up to list its shares on the London Stock Exchange. It had hoped to launch the listing in the second quarter of this year, once its 2010 results were released.

The listing will be an important test of investor appetite for Dubai government-linked investments, which have been tainted by multibillion-dollar debt problems haunting DP World's parent company, Dubai World.

Sharaf said Wednesday the company remains "on track" for the London listing. He declined to give a timeframe, saying only that it would take place "in a timely manner."

About 20 per cent of DP World is now available to investors through a listing on the Nasdaq Dubai stock exchange. It is unclear whether the company will float a larger stake once it sets up the additional listing in London.

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