DP World upbeat on new business despite flat growth in 2019 container volumes

DP World said it is seeing “positive signs of progress” in its new businesses after reporting flat growth in its shipping container volumes in 2019 amid market uncertainty from trade wars and geopolitical tensions.

The Dubai-based ports operator handled 71.2 million twenty-foot equivalent units (TEUs) across its global portfolio of container terminals last year, with gross container volumes flat year-on-year on a reported basis and up one per cent on a like-for-like basis, DP World said in a statement to Nasdaq Dubai on Tuesday.

“2019 has been a challenging year with the trade war between China and US and regional geopolitics causing uncertainty in the market,” Sultan bin Sulayem, group chief executive of DP World, said.

In the fourth quarter of 2019, like-for-like gross volumes increased 2.1 per cent, driven by growth in Asia Pacific and Africa, the global ports operator said.

DP World operates Dubai’s Jebel Ali port, the Middle East’s biggest trans-shipment hub, as well as Mina Rashid.

Jebel Ali handled 3.4m TEUs in the fourth quarter of 2019, a 6.2 per cent drop from the year before.

In 2019, the port handled 14.1 million TEUs, down 5.6 per cent year-on-year, which DP World blamed on a decline in low-margin cargo.

In the near-term, DP World’s focus is on integrating its recent acquisitions, managing costs and disciplined investment, the company said.

“We are seeing positive signs of progress in our new businesses that give us encouragement for the future,” Mr bin Sulayem said. “Overall, we remain well placed to deliver full year market expectations.”

DP World has sealed a string of deals in 2019 that included buying UK transport and logistics company P&O Ferries, Indian rail logistics company Kribhco Infrastructure and Chilean ports operator Puertos y Logistica. The Dubai-based ports operator’s chief executive Mr bin Sulayem told Bloomberg on January 20 that he sees growth opportunities in Africa and India.

Last month, the company said it acquired a 44 per cent share in Swissterminal Holding, a container terminal operator in Switzerland, effective from January 20.