Debt burden rises on acquisitions
- Dubais DP World profits rise 22.3 per cent year on year to $455m for the first hal of 2015
- The increase is due to the acquisition of another Dubai World subsidiary, Economic Zone World
- This pushed DP Worlds gross debt to $8.2m, mainly in bonds
Dubais port operator DP World has posted first half profits of $455m, a 22.3 per cent increase on the $332m profits recorded in the first half of 2014.
Revenues increased 14.5 per cent to $1.9bn for the half, thanks to the $2.6bn acquisition of local Economic Zone World (EZW).
Without the EZW effect, DP Worlds profits rose by 5.4 per cent.
Both companies are subsidiaries of Dubai World, which is struggling with a debt burden of around $26bn.
Dubai World transferred EZW, which has $859m of debt according to Reuters, as part of its $14.6bn restructuring early in 2015.
DP Worlds gross debt increased to $8.2 billlion, mainly in bonds. Its net debt rose to $5.8bn, up from $2.3bn in June 2014, as acquisitions drained cash resources.
DP World also acquired local Jebel Ali Freezone and a terminal in Turkey. Both new terminals are expected to open later in 2015.
The company has added 3 million (twenty-foot equivalent units (TEUs) of new capacity in 2015. The number of containers DP World handled rose 3.5 per cent year on year to 14.4m TEUs over the half. Revenue per TEU also grew by 2.1 per cent over the same period, pushing container revenue up by 5.7 per cent.
This financial performance has been achieved despite uncertain market conditions, which once again demonstrates the well diversified and resilient nature of our portfolio, said Sultan Ahmed Bin Sulayem, chairman of DP World. In 2015, we have invested over $3.5 billion in acquisitions and expansionary capex, and this investment leaves us well placed to capitalise on the significant medium to long-term growth potential of this industry.
The company expects to spend $1.6-1.9bn on capex in 2015.
DP World told reporters in a call that it was also looking at expanding its operations to Iran.
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