Despite the considerable challenges posed by the Red Sea crisis and the geopolitical situation, Dubai-based DP World remains “optimistic” about the medium to long-term prospects of the industry after recording 3.3 percent growth in revenue to $9,335 million for the first six months ended 30 June 2024.
The revenue growth was driven by ports and terminals. Like-for-like gross container volumes grew 6.1 percent driven by strong growth in Americas, Europe, Asia Pacific, and Jebel Ali.
On a reported basis, adjusted EBITDA decreased by 4.3 percent to $2,497 million, with an adjusted EBITDA margin of 26.8 percent. The dip in adjusted EBITDA was due to the Red Sea disruption and organic investment in logistics platform expansion.
Sultan Ahmed Bin Sulayem, DP World Group Chairman and CEO, commented: “We are pleased to report resilient results, with revenue increasing by 3.3 percent in the first half of the year, despite challenging macroeconomic conditions.
“The year 2024 has been marked by a deteriorating geopolitical environment and disruptions to global supply chains due to the Red Sea crisis. Nevertheless, our strategic emphasis on high-margin cargo, comprehensive end-to-end supply chain solutions, and stringent cost management have been crucial in achieving this financial performance.
“In logistics, our investments have been focused on organically expanding our freight forwarding platform, which now encompasses over 90 percent of global trade across more than 150 locations worldwide. Strategic investments in sectors poised for high growth allow us to provide value-added services, and we remain dedicated to continuously improving our logistics capabilities. This includes tackling supply chain inefficiencies and enhancing connectivity in key trade corridors to better support cargo owners.”
However, cash generation remains robust and the balance sheet was strong. Cash generated from operating activities stood at $2,091 million, compared to $2,134 million in H1 2023. Leverage (net debt to adjusted EBITDA) stands at 3.8x (up from 3.7x last year). The company’s financial policy is to manage the balance sheet at below 4.0x to retain a strong investment grade rating.
“Our balance sheet remains strong, and our operations continue to produce substantial cash flow. This financial strength provides the flexibility to further invest in our current portfolio’s growth and to seize new investment opportunities as they emerge,” Bin Sulayem added.
“While the near-term trading outlook remains uncertain due to macroeconomic and geopolitical headwinds, the resilient financial performance of the first half and the positive momentum as we enter the second half, positions us well to deliver stable full-year adjusted EBITDA.
“We remain optimistic about the medium to long-term prospects of the industry and DP World’s ability to deliver sustainable returns consistently.”
DP World’s capital expenditure in H1 2024
DP World continued to invest across key growth markets. Capital expenditure for H1 2024 was $994 million, and increase of $84 million from the corresponding period last year. Off this, $593 million was invested in Ports and Terminals, $278 million in Logistics and Parks and Economic Zones and $122 million in Marine Services.
The company said the capital expenditure guidance for 2024 is approximately $2 billion to be invested in the UAE including Drydocks World, London Gateway (United Kingdom), Inland logistics (India), Dakar (Senegal), East Java (Indonesia), Callao (Peru), Jeddah (Saudi Arabia), Dar Es Salam (Tanzania) and DP World Logistics (Africa) and Fraser Surrey Docks (Canada).
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