DP World Posts 123% Jump in Net Profit, Continues to Expand Operations

By Jason Simpkins
Associate Editor

DP World, the world's fourth-largest ports operator said yesterday (Thursday) net income more than doubled in the first half of the year, and is expected to deliver full-year results in line with expectations, despite "indications of weakening economic growth in some markets."

DP World operates 44 ports around the world, as well as the Jebel Ali base, located in the United Arab Emirates. The amount of cargo funneled through the company's ports rose 21% in the first six months of the year. Revenue jumped 32% to $1.6 billion and earnings per share climbed from 78 cents a share to $1.67 a share – a 114% increase. 

"DP World has performed extremely well in the first half of this year," company chairman Sultan Ahmed Bin Sulayem said in a statement. "Building on its outstanding performance in 2007, the company recorded a profit after tax for continuing operations of $287 million; more than double that of the same period last year and particularly pleasing given the more challenging operating environment in the first half of this year."

During the first half, DP World added new ports in Dakar, Senegal, and Sokhna, Egypt, and increased its stakes in terminals in Chennai, India, and Karachi, Pakistan. The construction of 13 new terminals is also on schedule, the company said.

DP World last week announced a $745 million contract to build a large new container port outside London.

"London Gateway is vitally important for today's U.K. economy. It will deliver the most efficient and technologically advanced port in the world and much needed deep sea capacity for the U.K.," Simon Moore, Chief Executive of London Gateway, said in a statement.

London Gateway is the UK's first deep-sea container port for over 25 years.

"Strong numbers throughout," said Deutsche Bank AG (DB) analyst Zahed Chowdhury, noting that robust growth in the company's core Europe, Middle East and Africa region "played a key role in contributing toward the improved margins."

Chowdhury rates DP World shares as "Buy."

News and Related Story Links:

• DP World:
  Interim Results/London Gateway

• The Associated Press:
  DP World 1H profit jumps 80 percent amid expansion

• Money Morning:
  Dubai: More Bubble or More Boom? Time Will Quickly Tell