DP World reports record half-year profits

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DP World Limited has announced strong financial results for the six months to 30 June 2022 with total revenue growing 60.4% year-on-year and 20.1% on a like-for-like basis.

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Results Highlights

Ø  Revenue of $7,932 million (Like-for-like revenue growth of 20.1%)

§  Revenue growth of 60.4% supported by acquisitions, strong performance of feedering services and growth in high margin cargo.

§  Container revenue per TEU increasing by 9.2% driven by higher demand for storage.

Ø  Adjusted EBITDA of $2,441 million and adjusted EBITDA margin of 30.8%

  • Adjusted EBITDA increased by $628 million, and EBITDA margin for the half-year stood at 30.8%. Like-for-like adjusted EBITDA margin was 38.2%.

Ø  Profit for the period attributable to owners of the Company increased to $721 million

§  Profit attributable to owners of the Company before separately disclosed items increased 51.8% on reported basis and 39.2% on a like-for-like basis.

Ø  Robust cash generation  

  • Cash from operating activities increases by 29.6% to $1,931 million in 1H2022 compared to $1,490 million in 1H2021.
  • Combined Leverage including PFZW guarantee (Net debt to annualised adjusted EBITDA) decreased to 3.8 times (pre-IFRS16) from 5.9 times at FY2021. On a post-IFRS16 basis, net leverage stands at 4.1 times compared to 6.0 times at FY2021.
  • DP World credit rating improves to BBB- with Positive Outlook by Fitch and remains at Baa3 with Stable Outlook by Moody’s.

Ø  Broadening of strategic partnerships strengthens balance sheet and drives long term value

  • Broadening of partnerships and monetisations to raise approximately $9 billion to significantly strengthen balance sheet and provide long term flexibility.
  • Expansion of CDPQ partnership in UAE to capture the growth potential of the wider region.
  • CDPQ-UAE transaction raised $5bn in tranche 1 for a 22% stake in the three UAE assets with up to a $3bn expected to be raised in tranche 2.
  • Expansion of NIIF India partnership expected to raise c.$300 million and will allow us to accelerate investment across ports and logistics
  • New partnership with UK’s development arm BII to unlock trade potential of Africa.
  • Optimisation of France portfolio raises c.$300 million

Ø  Selective Investment in Key Growth Markets 

§  Capital expenditure of $741 million ($687 million in 2021) invested across the existing portfolio during the first half of the year.

§  Capital expenditure guidance for 2022 is for up to $1.4 billion with investments planned into UAE, Jeddah (Saudi Arabia), London Gateway (UK), Sokhna (Egypt), Senegal and Callao (Peru).

Ø  Transformation of business to drive revenue synergies and long-term relationship with cargo owners

§  New logistics assets bring value-add capabilities in fast growing markets and verticals.

§  Near-term focus on continued business transformation to drive revenue synergies.

§  Deliver value add solutions to cargo owners by leveraging our best-in-class infrastructure across logistics, ports & terminals, economic zones, digital and marine services.

Ø  Strong 1H2022 Performance, Outlook uncertain

  • 1H2022 performance has been ahead of expectations but we expect growth rate to moderate in 2H2022 on more challenging economic environment.

§  Outlook is uncertain due to geopolitics, higher inflationary environment, currency fluctuations and continued supply chain disruptions.

§  DP World remains positive on medium to long-term outlook for global trade and is focused on delivering integrated supply chain solutions to cargo owners to drive growth and returns.

DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented:

“We are delighted to report a record set of first half results with adjusted EBITDA growing 34.6% and attributable earnings rising 51.8%. This significant growth demonstrates that our strategy to focus on high margin cargo and to offer customized supply chain solutions will provide sustainable returns in the long term.

Encouragingly, cargo owners continue to respond positively to our end-to-end product offering and we are focused on integrating our recent logistics acquisitions to further drive revenue synergies. We continue to invest in high growth verticals and markets to offer compelling supply chain solutions, and by leveraging our best-in-class infrastructure across logistics, ports & terminals, economic zones, digital and marine services, DP World aims to lower inefficiencies and improve connectivity in key trade lanes.

In recent months we have announced several transactions to raise approximately $9 billion.  This strengthening of the balance sheet allowed us to achieve our 2022 leverage target of below 4x Net Debt to EBITDA, and this fresh capital also provides us with the flexibility to accelerate investment in key growth markets whilst maintaining an investment grade rating.

Overall, the strong first half performance leaves us well placed to deliver improved full year results. However, the near-term outlook remains uncertain due to the more challenging macro and geopolitical environment. Consequently, we expect growth rates to moderate in the second half of 2022.  Nevertheless, we remain positive on the medium to long-term fundamentals of the industry and DP Worlds ability to continue to deliver sustainable returns.”