- DP World Jebel Ali, UAE.
- DP World
After posting a decent set of numbers in the first half, a company can be excused if it sounds optimistic about its growth outlook.
In DP World’s case – the numbers are more than decent. The Dubai-based ports operator, one of the largest globally, reported a solid 26% jump in six-month earnings as it added new capacity amid a pick up in global trade.
Senior executives reckon the company is well positioned to capitalise on the “significant” medium to long-term growth potential of the industry. It plans to substantially expand handling capacity at existing operations such as its flagship Jebel Ali port in the United Arab Emirates.
And, not surprisingly, DP World seeks new investment opportunities in faster growing markets.
“Our balance sheet remains strong and we continue to generate high levels of cashflow, which gives us the ability to invest in the future growth of our current portfolio, and the flexibility to make new investments should the right opportunities arise,” Mohammed Sharaf, the group’s chief executive, said.
It makes sense. DP World recently raised $1 billion through a convertible bond, and also increased its revolver facility from $1 billion to $3 billion.
With bank balances and cash of $3.5 billion, the company not only has the flexibility to expand its existing business but also has the resources to add to its portfolio should favourable assets at attractive prices become available, Mr. Sharaf said. He declined however to say if they are currently looking at any potential deals.
The ports operator in recent years has added new capacity in developed markets, while also investing in fast-growing emerging markets – a strategy that appears to be paying off as the global economy strengthens.
DP World’s portfolio now has more than 65 terminals across six continents, which include new developments underway in India, Africa, Europe, and the Middle East. Its recently opened greenfield projects in Brazil and the U.K. are also making good progress, according to the company.
By 2015 DP World expects to have about 85 million twenty-foot equivalent units (TEU) of capacity globally and more than 100 million TEU of capacity by 2020.
“The near term outlook remains encouraging,” Mr. Sharaf said. The market is expected to grow at about 5% in 2014, which DP World expects to outperform.
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(via WSJ Blogs)