UAE’s port operator DP World posts 10% rise in profits to $1.29 billion in 2018 amid China-US trade war

Dubai: DP World, the Dubai-based ports operator, reported on Thursday a 10.2 per cent jump in its net profit for 2018 as revenues grew, driven by acquisitions of other companies.

The company recorded $1.3 billion (Dh4.77 billion) in profit for the year attributable to owners after separately disclosed items, compared to $1.18 billion in 2017. The growth came even as DP World cited trade disputes around the world and geopolitical challenges.

The operator said that acquisitions helped it “weather the storm” of trade tensions in 2018. Revenues for the year were also higher, at $5.6 billion, marking a 20 per cent jump year-on-year.

In a statement, the company said it expects to continue delivering growth in 2019 despite an “uncertain” outlook.

“Current year has started with trading in line with expectations and whilst the near-term outlook remains uncertain with the trade war and geopolitical headwinds, we expect our portfolio to remain resilient and see increased contributions from our recent acquisitions and investments,” said Sultan Bin Sulayem, DP World Group chairman and chief executive officer.

As far as the United States, there’s nothing to stop us from going there, but we haven’t found an opportunity that is profitable.

Sultan Bin Sulayem | DP World Group chairman and chief executive officer

He added that global trade is expected to grow at around three to four per cent in 2019, after growing at four per cent in volume terms in 2018. The company also expects to see increased financial contribution this year from its new investments.

In 2018, the operator spent $2.5 billion on acquisitions, closing deals to buy Drydocks World, Dubai Maritime City, Cosmos Agencia Maritima, and Continental Warehousing Corporation.

In a press conference in Dubai, Bin Sulayem said that DP World is currently studying “a few acquisition opportunities” across the world, but could not disclose more details on those or confirm that they will be completed.

Asked about the location of any upcoming deals or where the company sees growth potential, the chairman said Latin America was still a “very important” market.

“The Americas are important to us. As far as the United States, there’s nothing to stop us from going there, but we haven’t found an opportunity that is profitable,” he said.

Yuvraj Narayan, DP World’s chief financial officer, who was also speaking to journalists said that the company isn’t necessarily eyeing ports in the US, but it will definitely do what it needs to be able to access the country’s large consumer market.

DP World invested $908 million in 2018 in capital expenditure, below its expected $1.4 billion as it curtailed spending “in response to the uncertain trade environment.”

The capital expenditure focused on its ports in the UAE, Ecuador, Somaliland, Egypt, and the United Kingdom. This year, the company plans to spend up to $1.4 billion capital expenditure, focusing on the UAE, Ecuador, Somaliland, Congo, and Egypt.

The company’s board is recommending an increase in dividends by 5 per cent to $365.9 million, or 43 US cents per share.