Profits at the Dubai-based ports operator were up 52 per cent compared to 2006, while revenues were up 32 per cent to $2.7bn, compared to $2.1bn in the previous year. The group’s profit margin increased to 40 per cent for the past year, and the business has net cash from operations of almost $1bn.
Announcing its results in Dubai on 7 April, chief financial officer Yuvraj Narayan said he expected growth in revenues and profit margins to continue in 2008 despite evidence of a global economic slow down.
“On the evidence of what we have seen in 2008, there is no evidence of our growth performance getting any weaker,” said Narayan. “In terms of our profit margins, for reasons of our efficiency we expect our margins to continue to expand to reach our target of 44 per cent in 2010.”
The company raised $4.96bn from its initial public offering on the Dubai International Financial Exchange in November, the largest ever in the Middle East. Its shares were listed at $1.30. They fell to 73 cents in March and were trading at 94 cents on the morning of 7 April.
“The 52 per cent growth in profits was achieved at the same time as the company made significant business wins and undertook an IPO,” Sultan bin Sulayem, chairman of DP World said. He said the results were better than market expectations.
“Trading in the first two months of 2008 has been strong, with throughput well ahead of the same period last year,” he said. “Whilst it is still early in the year, and growth across global markets remains uncertain, we believe we are well placed to deliver good results this year.”
DP World is pressing ahead with plans to double its capacity by 2017, from the current 54 million twenty-foot-equivalent units (TEU).
Sulayem said the company handled 43.3 million containers in 2007, 18 per cent more than in 2006. “We expect an increase of 10 per cent per annum for the foreseeable future,” he said.
New projects will add 25.3 million TEU capacity by 2017. Bin Sulayem said that the company was investing in 13 new developments around the world. Jebel Ali continues to account for the largest portion of the company’s capacity at 11 million TEUs in April 2008.
On 5 April, DP World signed an agreement to run the container port at Saudi Arabia’s King Abdullah Economic City in Rabigh. It is designed to have long-term capacity of 20 million TEUs.