DP World revenue grew 9.6 per cent in the first half of 2017
Like-for-like earnings rose 15.8 per cent.
Global trade enabler DP World today announces solid financial results for the six months to 30 June 2017. On a reported basis, revenue grew 9.6 per cent and adjusted EBITDA increased by 4.2 per cent. Adjusted EBITDA margin was 53.4 per cent, delivering profit attributable to owners of the company, before separately disclosed items, of $606 million and EPS of 73.0 US cents. On a like-for-like basis, revenue grew three per cent and adjusted EBITDA increased by seven per cent, adjusted EBITDA margin of 54.8 per cent, attributable earnings up by 15.8 per cent, reflecting the improved trading environment.
Commenting on the results, DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem said, “DP World is pleased to announce a solid set of first half results with attributable earnings of $606 million, and like-for-like earnings growth of 15.8 per cent. Adjusted EBITDA reached $1,225 million as margins were maintained at above 50 per cent. Encouragingly, after a challenging period, we have seen a pick-up in global trade particularly in the second quarter of the year, and that combined with the ramp up in our recent investments in Yarimca (Turkey), London Gateway (UK), Rotterdam (Netherlands) and JNP Mumbai (India), has delivered ahead-of-market volume growth.
“In the first half of 2017, we have invested $595 million of capex in key growth markets, and announced over $170 million of acquisitions in our maritime business, which offers significant growth opportunities. These investments leave us well placed to deliver on our strategy to strengthen our port related services and capitalize on the significant medium to long-term growth potential of this industry.
“Our balance sheet remains strong and we continue to generate high levels of cashflow, which gives us the ability to invest in the future growth of our current portfolio, and the flexibility to make new investments should the right opportunities arise as well as delivering enhanced returns to shareholders over the medium term.
“Looking ahead to the second half of the year, we expect higher levels of throughput to be maintained. Overall, the steady financial performance of the first six months leaves us confident in meeting full-year market expectations.”
Revenue growth of 9.6% ($2,295 million) supported by the strong volume growth across all three DP World regions. Like-for-like revenue increased by three per cent driven by a 4.2% increase in total containerized revenue.
The company reported an adjusted EBITDA of $1,225 million and adjusted EBITDA margin of 53.4 per cent (Like-for-like adjusted EBITDA margin at 54.8 per cent). Adjusted EBITDA grew 4.2 per cent and EBITDA margin for the half year reached 53.4 per cent. Like-for-like adjusted EBITDA increased at a stronger pace of seven per cent resulting in a margin of 54.8 per cent.
Profit for the period attributable to owners of the company were $606 million. Strong adjusted EBITDA growth resulted in a 15.8% increase in profit attributable to owners of the Company before separately disclosed items on a like-for-like basis but on a reported basis earnings remained flat (-0.3%).
Strong cash generation, robust balance sheet and credit rating upgrade has generated cash from operating activities amounting to $1,009 million up from $905 million in 1H2016. Leverage (Net debt to annualised adjusted EBITDA) decreased to 2.6 times (from 2.8 times at 31 December 2016). DP World was recently upgraded by Fitch Ratings to BBB+ from BBB with stable outlook, after both Fitch and Moody’s upgraded the rating by one notch last year.
DP World has continued investment in high quality long-term assets with strong supply/demand dynamics. Capital expenditure of $595 million invested across the portfolio during the first half of the year. Capital expenditure guidance for 2017 remains unchanged at $1.2 billion with investments planned into Jebel Ali (UAE), London Gateway (UK), Prince Rupert (Canada) and Berbera (Somaliland). DP World subsidiary, P&O Maritime, acquired Spanish Maritime Service operator Reyser to further develop the Group’s maritime offering as well as adding complementary or related services to further diversify and strengthen our business.
Rebound in global trade and market share gains has improved trading environment in first half of 2017 and market share gains from the new shipping alliances driving volumes in the second quarter of the year. Robust performance across all three regions. Well placed to meet full year 2017 market expectations.
Market conditions in the Middle East, Europe and Africa region improved as UAE volumes recovered and London Gateway won the regular Asia-Europe service from THE alliance. Volumes in the UAE were up by 4.3 per cent and the EMEA region grew at 5.4 per cent year-on-year in the first half. Reported revenue in the region grew 3.5 per cent to $1,597 million, aided by the performance of the Jebel Ali Free Zone as non-containerized revenue grew six per cent. On a like-for like basis, revenue grew 1.5 per cent as containerized other revenue grew 3.4 per cent and total containerized revenue grew 2.3 per cent.
Adjusted EBITDA was $945 million, 8.7 per cent ahead of the same period last year mostly due to improved trading in the UAE and new services at London Gateway, while adjusted EBITDA margin rose to 59.2 per cent. Like-for-like revenue and adjusted EBITDA growth on prior year at constant currency was 1.5 per cent and 5.8 per cent respectively. Like-for-like adjusted EBITDA margins stood at 60.8 per cent.
DP World invested $493 million in the region, mainly focused on capacity expansions in Jebel Ali port (UAE), Jebel Ali Free Zone (UAE) and London Gateway (UK).