Global trade enabler DP World announced strong financial results for the twelve months ending 31 December 2017.
On a reported basis, revenue grew 13.2% and adjusted EBITDA increased 9.1% with adjusted EBITDA margin of 52.4%, delivering profit attributable to owners of the Company, before separately disclosed items1 , of $1,209 million, up 7.3%, and EPS of 145.6 US cents. On a like-for-like basis, revenue grew 6.0%, adjusted EBITDA increased by 8.0% with adjusted EBITDA margin of 53.2%, and earnings attributable to owners of the Company increased 15.1%.
➢ Revenue of $4,715 million
▪ Revenue growth of 13.2% supported by the strong volume growth across all three DP World regions.
▪ Like-for-like revenue increased by 6.0% driven by a 6.9% increase in total containerized revenue.
▪ Like-for-like containerized revenue per TEU (twenty-foot equivalent unit) grew 0.7% and total revenue per TEU remained broadly flat (-0.2%).
➢ Adjusted EBITDA of $2,469 million and adjusted EBITDA margin of 52.4%
▪ Adjusted EBITDA grew 9.1% and achieved an EBITDA margin for the full year of 52.4%. Likefor-like adjusted EBITDA margin was at 53.2%.
➢ Profit for the period attributable to owners of the Company of $1,209 million
▪ Strong adjusted EBITDA growth resulted in a 7.3% increase in profit attributable to owners of the Company before separately disclosed items on a reported basis and 15.1% growth on a like-for-like basis at constant currency.
➢ Strong cash generation, robust balance sheet and credit rating upgrade
▪ Cash from operating activities increased to $2,412 million up from $2,002 million in 2016.
▪ Free cash flow (post cash tax maintenance capital expenditure and pre-dividends) amounted to $2,095 million against $1,674 million in 2016.
▪ Leverage (Net Debt to adjusted EBITDA) decreased to 2.5 times from 2.8 times in 2016.
▪ DP World was upgraded again by rating agency Fitch to BBB+ from BBB with stable outlook following the one notch upgrade in 2016.
➢ Total dividend per share increased by 7.9% to 41 US cents
▪ Ordinary dividend increased by 7.9% to 41 US cents to reflect earnings growth in 2017.
➢ Continued investment in high quality long-term assets to drive long-term profitable growth
▪ Capital expenditure of $1,090 million invested across the portfolio during the year, below the Group’s guidance of approximately $1,200 million in 2017.
▪ In 2017, gross global capacity was at 88 million TEU and is expected to grow to over 100 million TEU of gross capacity by 2020, subject to market demand.
▪ Consolidated capacity was at 50 million TEU up from 42 million TEU in 2016 including the consolidation of Pusan (South Korea).
▪ We expect capital expenditure in 2018 to be up to $1.4 billion with investment planned mainly into UAE, Posorja (Ecuador), Berbera (Somaliland), Pusan (South Korea), Maputo (Mozambique) and Sokhna (Egypt).
➢ Investment partnership with NIIF and consolidation of DP World Santos
▪ DP World has partnered with the Government of India sponsored, National Investment and Infrastructure Fund (NIIF), to create an investment platform of up to $3 billion of equity to acquire assets and develop projects in the ports, transportation and logistics sector in India.
The partnership will also look at opportunities beyond sea ports such as river ports and transportation, freight corridors, special economic zones, inland container terminals, and logistics infrastructure including cold storage.
▪ DP World acquired an additional 66.67% stake in Embraport in the Port of Santos (Brazil) from Odebrecht Transport (OTP) to take its shareholding to 100%. The terminal has an annual capacity of 1.2 million TEU and has been rebranded to DP World Santos.
➢ Rebound in global trade and market share gains
▪ Benefitting from the improved trading environment and market share gains, our global portfolio delivered ahead-of-market volume growth in 2017.
▪ Strong performance across all three regions.
▪ Looking ahead into 2018, we expect to continue to grow ahead of the market and see increased contributions from our new developments.
DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented:
“We are pleased to announce another set of strong financial results in 2017, as we again delivered earnings in excess of $1 billion and above 50% EBITDA margin for the full year. On a like-for-like basis, our earnings grew at 15.1% ahead of revenue growth of 6.0% and EBITDA growth of 8.0%. Encouragingly, our volumes have continued to grow ahead of the market with gross volumes growing 10.1% year-on-year, ahead of Drewry Maritime’s full year market estimate 8 of 6.0%. Our portfolio has seen strong performance across all three regions benefitting from the improved trading environment and market share gains.
“In recent years, we have leveraged on our in-house expertise to extend our core business into port-related, maritime, transportation and logistics sectors with the objective of diversifying our revenue base and connecting directly with the owners of cargo and aggregators of demand to remove inefficiencies in trade, improve the quality of our earnings and drive returns. Going forward, we expect this trend to continue as we seek opportunities in complementary sectors in the global supply chain and also make use of new technology and data solutions to provide better service to our customers.
“In 2017, we invested $1,090 million of capital expenditure across our portfolio in markets with strong demand and supply dynamics, and we will maintain capital expenditure discipline by bringing capacity in line with demand.
“The Board of DP World recommends increasing the dividend by 7.9% to $340.3 million at 41.0 US cents per share. The Board is confident of the Company’s ability to continue to generate cash and support our future growth whilst maintaining a consistent dividend payout.
“Our significant cash generation and investment partnerships, leave us with a strong balance sheet and flexibility to capitalise on the significant growth opportunities in the industry and deliver enhanced shareholder value over the long term.
“We have made an encouraging start to the year with current trading in line with expectations.
As we look ahead into 2018, geopolitical headwinds in some regions pose a challenge but we expect to continue to grow ahead of the market and see increased contributions from our recent investments.”