DP World, the world's fourth largest terminal operator, reported a marginal decrease in its first-half 2017 net income on Thursday but said improvements in the global trading environment keep it on track to meet full-year market expectations.
The profit attributable to the shareholders reached US$606 million for the six months to June 30, which compares with a profit of $608m for the corresponding period of 2016, the firm said in a statement to Nasdaq Dubai, where its shares are traded. The income for the period was in line with Egyptian lender EFG-Hermes’ estimates.
DP World's revenue for the first six months of 2017 climbed 9.6 per cent to $2.29bn. Cash from operating activities for the period also climbed to $1bn, up from $905m recorded in the first half of 2016.
“Our balance sheet remains strong and we continue to generate high levels of cash flow, 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,” DP World’s group chairman and chief executive, Sultan Ahmed Bin Sulayem said.
Port operators across the globe have struggled to maintain profitability on the back of slower global trade and weaker economic growth due to persistently low prices of oil. However, the trade is picking up pace and DP World said it improved, particularly, in the second quarter of this year.
The firm, which was upgraded by Fitch to BBB+ from BBB recently after both Fitch and Moody’s increased its rating by one notch in 2016, said the volumes were driven by market share gains through new shipping alliance and its performance across all three regions, where it operates, was “robust”.
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DP World gross container volume advances 10.7% in second quarter
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DP World subsidiary, P&O Maritime acquired Spanish Maritime Service operator Reyser in June. The firm spent $595m in capital expenditures in its key growth markets during the first six months of this year and announced investments of $170m in acquisitions of maritime businesses.
“These investments leave us well placed to deliver on our strategy to strengthen our port related services and capitalize on the significant medium to long-term growth potential of this industry,” Mr Bin Sulayem said, adding that the capital expenditure guidance for 2017 remains unchanged at $1.2bn with investments planned into home-port of Jebel Ali, the UK’s London Gateway, Canada’s Prince Rupert and Somaliland’s Berbera facilities.
The firm also reported 33.9m twenty-foot equivalent units (TEUs) of gross throughput for the first half of 2017, an 8.2 per cent increase over the same period last year. The consolidated throughput rose by 22.4 per cent to 17.87m TEUs.
“Looking ahead to the second half of the year, we expect higher levels of throughput to be maintained. Overall, the steady financial performance of the first six months leaves us confident in meeting full-year market expectations,” he said.
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Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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Kareem Abdul-Jabbar 38,387
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Kobe Bryant 33,643
Michael Jordan 32,292
LeBron James 31,425
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Engine: 3.0-litre six-cylinder turbo
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Opening day UAE Premiership fixtures, Friday, September 22:
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