US-based Fitch Ratings has upgraded DP World’s long-term issuer default rating (IDR) to BBB from BBB-, and its short-term IDR to F2 from F3.

The upgrade reflects the group’s solid and stable cash flow generation, Fitch said in a statement. The company also indicated DP World’s outlook as stable.

“We believe the flexibility embedded in the group’s expansionary plan will allow DP World to maintain Fitch-adjusted leverage below 5x, which is commensurate with the higher rating,” the rating agency added.

DP World recently signed an agreement with the port authority of Saint John, New Brunswick in Canada to expand and operate the Rodney Container Terminal, and has signed a memorandum of understanding (MoU) to develop Terminal 7 of Taiwan’s Kaohsiung Port.

DP World currently operates three other ports in Canada’s west coast, including the Vancouver Centerm terminal, Fairview terminal in Prince Rupert and the Duke Point terminal in Nanaimo.

DP World’s credit profile “is supported by the geographical diversification of its business, the high utilisation rate of its terminals, which supports the group’s pricing power as well as the long-term maturity of its main concession,” the statement said.

Jebel Ali is DP World’s main concession and is the region’s largest marine terminal.

DP World reported profits of $970m on the back of $3.9bn revenues made in the 12 months ending 31 December 2015. This marked a rise of 28 per cent in profits and 16.3 per cent in revenues.

The company attributed its revenue growth for the year to a 4.9 per cent increase in containerised revenue.

The firm’s consolidated throughput for 2015 reached 29.1 million twenty-foot equivalent units (TEUs), a 2.7 per cent increase compared to 2014.

DP World’s credit profile is not without a weakness, however. “The lack of covenants and other creditor protective features in DP World’s debt structure is a weakness,” Fitch said.

Such weakness, however, is compensated for by DP World’s well-established access to the capital markets and its solid liquidity position, which mitigates the refinancing risk. “DP World is acquisitive and this reduces the long-term visibility of its capital structure,” Fitch added.

Fitch added that the ratings reflect DP World’s standalone credit profile and do not include support or constraint from its ultimate parent, the Dubai government.