Disruptions in the Red Sea and increased investment costs have combined to slash first-half net profit for terminal operator DP World by nearly 60%.
Interim net profit was $265m against the $651m achieved in the corresponding period last year, the government-owned company said.
Although revenue for the period rose by 3.3% year on year to $9.3bn, earnings before interest and tax fell by 6.8%, to $1.5bn partly due to the Red Sea disruption.
The Dubai-headquartered outfit described its first-half performance as “resilient” despite what it described as “challenging geopolitical and economic headwinds”.
“In 2024, the global landscape has been marked by increasing geopolitical tensions, with the Red Sea crisis emerging as a significant disrupter in the supply chain sector,” DP World chief executive Sultan Ahmed bin Sulayem said.
“This situation has presented considerable challenges, affecting global trade routes and logistics operations. Despite these adversities, DP World has managed to maintain a resilient financial performance.”
DP World said its like-for-like container volumes increased by 6.1% in the first half of 2024, despite some terminals being affected by the Red Sea crisis.
“Strong performance in the Americas, Asia Pacific and Europe were the key drivers of growth. Encouragingly, Jebel Ali in the United Arab Emirates continues to deliver a solid performance,” bin Sulayem said.
DP World said new additions in Tanzania and Indonesia, along with ongoing expansions across its existing portfolio, have positioned the company to exceed a capacity of 100m teu by the end of this year.
DP World’s container ship operation, Unifeeder, saw a decline in both revenue and adjusted Ebitda, as Red Sea disruptions impacted volumes, particularly in Europe.
This decline was mitigated by a robust performance from Drydocks World in the UAE, which benefited from new contracts.
Capital expenditure during the first half of 2024 amounted to $994m, comprising $593m spent on ports and terminals, $278m on logistics and parks and economic zones, $122m on marine services and $1m at its head office.
DP World plans to spend a further $1bn in the second half of the year to be invested in the UAE including Drydocks World and London Gateway as well as operations in India, Senegal, Indonesia, Peru, Saudi Arabia, Tanzania and Canada.
Looking ahead, the P&O Ferries owner said it was “confident” second-half earnings would improve despite the near-term outlook being uncertain.
“The resilient financial performance of the first half and the positive momentum as we enter the second half positions us to deliver stable full-year adjusted Ebitda,” the company said.
“We remain optimistic about the medium to long-term prospects of the industry and DP World’s ability to deliver sustainable returns consistently.”
