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Thu 23 Apr 2020 04:09 PM

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DP World sees 'uncertainty' in 2020 despite stable first quarter

Group chairman and CEO Sultan Ahmed bin Sulayem said that the impact of the Covid-19 is a 'cause for concern' but that the sector's long-term fundamentals remain promising

DP World sees 'uncertainty' in 2020 despite stable first quarter

The logistics sector is facing ‘uncertainty’ amid the Covid-19 pandemic despite a relatively stable first quarter for Dubai-based ports operator DP World, according to group chairman and CEO Sultan Ahmed bin Sulayem.

In a statement on Thursday, DP World said that it handled 17.2 million twenty-foot equivalent units (TEUs) in Q1. Gross container volume fell by 1.7 percent year-on-year on a reported basis, and up 0.3 percent on a like-for-like basis.

Reported volumes feel in the Asia Pacific and India regions due to the expiry of a number of concessions.

The DP World statement that Jebel Ali Port handled 3.4 million TEU in Q1, down 3.4 percent from the year as a result of lower-margin cargo. Like-for-like growth in Asia, the Middle East and Africa was offset by weakness in other areas.

Bin Sulayem said that while the company’s performance was “resilient” and broadly flat in Q1, the impact of the Covid-19 pandemic would only start to show later on in the year.

“Global trade and container volumes are forecast to decline in 2020 and the wide range of estimates by industry specialists…further emphasises the short-term uncertainty faced by our sector,” he said. “Similarly, the timing of any recovery is uncertain with trade expected to pick-up as and when global economic activity normalises.”

Bin Sulayem added that the outlook is “a cause for concern” but that DP World remains positive about the long-term fundamentals of the industry.

“Furthermore, our strategy of providing integrated supply chain solutions to beneficial cargo owners leaves us well placed to benefit early for any sustained recovery in the global economy,” he added.

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