Third-quar­ter gross con­tainer vol­umes de­cline 1.6% at DP World

The National - News - - BUSINESS - DEENA KAMEL

DP World, the world’s big­gest ports op­er­a­tor, warned about an “un­cer­tain” out­look from geopo­lit­i­cal ten­sions af­ter re­port­ing a drop in third-quar­ter ship­ping con­tainer vol­umes across its global ter­mi­nals.

The Dubai com­pany’s gross con­tainer vol­umes fell 1.6 per cent to 17.7 million Twenty-Foot Equiv­a­lent Units (TEUs) com­pared with 18 million a year ago amid de­clin­ing vol­umes in Asia-Pa­cific and In­dia and flat growth in Dubai, DP World said in a state­ment to Nas­daq Dubai yes­ter­day.

“Our port­fo­lio con­tin­ues to de­liver a steady vol­ume per­for­mance which is en­cour­ag­ing given the chal­leng­ing macro back­drop caused by the global trade dis­pute,” said Sul­tan bin Su­layem, DP World’s chair­man.

“While we have seen vol­umes sta­bil­is­ing in Jebel Ali, the out­look re­mains un­cer­tain given the re­gional geopol­i­tics and we re­main fo­cused on prof­itable ori­gin and des­ti­na­tion cargo.”

Threats from an es­ca­lat­ing trade war be­tween the US and China, the world’s two big­gest economies, are weigh­ing on busi­nesses and cloud­ing the out­look for fu­ture growth.

Geopo­lit­i­cal fric­tion in the Mid­dle East be­tween the US and Iran has also led to ten­sion in the Strait of Hor­muz. This has prompted a US-led coalition of coun­tries known as the In­ter­na­tional Maritime Se­cu­rity Con­struct to com­mit troops, planes and ships to ac­com­pany and track ves­sels pass­ing through the Ara­bian Gulf. The on­go­ing saga of the UK’s exit from the Euro­pean Union has also fu­elled un­cer­tainty and hurt busi­ness con­fi­dence.

DP World recorded a 4.6 per cent de­cline in vol­umes in Asia-Pa­cific and In­dia on a re­ported ba­sis be­cause of dis­con­tin­ued op­er­a­tions in Surabaya in In­done­sia, and Tian­jin in China, it said.

Vol­umes at its Jebel Ali port in Dubai dipped 1 per cent to 3.6 million TEUs as vol­umes sta­bilised fol­low­ing a shift of low-mar­gin cargo, it said.

Con­sol­i­dated vol­umes in the three months to Septem­ber 30 grew to 10.3 million TEUs, up 12.6 per cent on a re­ported ba­sis but only 0.8 per cent on a like-for-like ba­sis, ac­cord­ing to the state­ment.

DP World han­dled 53.5 million TEUs across its global port­fo­lio of con­tainer ter­mi­nals in the first nine months of the year, with gross con­tainer vol­umes de­clin­ing 0.2 per cent year-on-year on a re­ported ba­sis but ris­ing 0.7 per cent on a like-for-like-ba­sis. Con­sol­i­dated vol­umes reached 29.7 million TEUs in the nine-month pe­riod, up 7.5 per cent on a re­ported ba­sis but down 0.9 per cent on a like-for-like ba­sis.

DP World, which op­er­ates ter­mi­nals from Peru to Aus­tralia, ex­pects full-year earn­ings to be in line with market ex­pec­ta­tions. It also said that it would fo­cus on in­te­grat­ing re­cent ac­qui­si­tions, man­ag­ing costs and dis­ci­plined in­vest­ment.

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

The ports op­er­a­tor is con­sid­er­ing fur­ther ac­qui­si­tions in the lo­gis­tics and sup­ply chain sec­tors to strengthen its po­si­tion as a “trade en­abler”, its chief ex­ec­u­tive Mo­hamed Al Muallem told The Na­tional this week, de­clin­ing to re­veal a time­line for any po­ten­tial deal or lo­ca­tion of pos­si­ble ac­qui­si­tion tar­get.

DP World con­tin­ues to see fur­ther po­ten­tial for growth in Africa and is still study­ing the US market for pos­si­ble ac­qui­si­tions, he said.

In July, DP World ac­quired Topaz Energy and Ma­rine, mark­ing its first foray into the oil and gas sec­tor.

The com­pany has been on an in­vest­ment spree since 2018 as its growth strat­egy evolves to in­clude the wider lo­gis­tics sup­ply chain. It snapped up UK trans­port and lo­gis­tics com­pany P&O Fer­ries, In­dian rail lo­gis­tics com­pany Krib­hco In­fra­struc­ture and Chile ports op­er­a­tor Puer­tos y Lo­gis­tica.

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