Wednesday, 25 March 2009

DP World puts new capacity plans on hold

DP World is to “defer” much of its planned new ports capacity until higher utilisation rates return, but adds that the rapid fall in worldwide container volumes “shows little sign of easing in the foreseeable future”.
The Dubai-based global ports group, which saw consolidated box volumes rise 15% in 2008 to 27.7m teu, has report strong revenue growth of 20% to nearly $3.3bn and ebitda up 22% to $1.3bn, with margins at 40.8% for the year.
DP World chairman Sultan Ahmed Bin Sulayem said: “The volume deceleration we saw in the last quarter of 2008 has continued into early 2009 and shows little sign of easing in the foreseeable future.
“Falling utilisation rates across container terminals globally mean the demand for new capacity in the short-term is much diminished.
“Taking into account our existing pipeline of committed capacity the company has decided to defer much of our planned new capacity until such time as higher utilisation rates return.”
The group’s under construction London Gateway project was not mentioned in a results statement issued this morning, but it remains the subject of industry speculation over a lengthening of the timetable for the phasing in of capacity.
When completed, London Gateway, on the north bank of the Thames and 25 miles from the capital city, is set to handle 3.5m teu.
Commenting on the group’s share price, Sultan Ahmed Bin Sulayem added: “Over the next few months, the board will evaluate all available options to address its continued disappointment with the market’s valuation of the company.
“We continue to remain confident of the long-term prospects for the container port industry and DP World’s leading global position within it. “Once the current challenging market eases, we believe DP World will emerge financially strong and well positioned to continue to deliver profitable growth.”
Global container volumes continue to show a sharp decline — DP World saw consolidated group volumes fall 8% in January and February this year.

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