DP World set for 'relatively stable' 2020 financial performance on solid volume

DP World is on track to report a "relatively stable" financial performance for 2020, but the outlook for this year remains uncertain due to the Covid-19 pandemic, its chairman said.

The global ports operator handled 71.2 million twenty-foot equivalent units (TEUs) in 2020, with gross volumes flat year-on-year and up 0.2 per cent on a like-for-like basis, it said in a statement on Monday. It did not report 2020 financial results.

At consolidated levels, the terminals handled 41.7 million TEU, up 4.6 per cent on a reported basis and down 1.8 per cent on a like-for-like basis.

In the fourth quarter of 2020, gross container volumes increased 7.6 per cent year-on-year on a reported basis and 6.5 per cent on a like-for-like basis.

"This strong end to the year resulted in flat growth in 2020 which compares favourably against an industry that is estimated to be down 2.1 per cent," Sultan Ahmed Bin Sulayem, group chairman and chief executive of DP World, said. "Overall, the full year solid volume performance leaves us well placed to deliver a relatively stable financial performance in 2020."

In 2019, DP World's profit attributable to owners after separately disclosed items reached $1.19 billion compared to $1.29bn in 2018. 

Global trade was hit hard by the Covid-19 pandemic in 2020. The value of global merchandise trade is projected to fall 5.6 per cent in 2020 compared with last year, according to the United Nations Conference on Trade and Development (UNCTAD)'s December report.

This would be the biggest fall in trade since 2009, when trade fell by 22 per cent. Still, it is a more optimistic projection than the UN body's earlier estimate of a 9 per cent drop.

DP World's chairman said all its regions registered growth in fourth-quarter volumes with India being a key driver. Its terminals in Mundra (India) London Gateway (UK), Rotterdam (Netherlands), Antwerp Gateway (Belgium) and Sokhna (Egypt) recorded a "strong performance."

DP World's flagship Jebel Ali port saw volumes slip 4.4 per cent to 13.48m containers.

The ports operator said it remains focused on containing costs to protect profitability and manage growth capital expenditure to preserve cashflow.

"Looking ahead, while 2021 has started encouragingly, the outlook remains uncertain given the continued issues surrounding the pandemic, geopolitical uncertainty in some parts of the world and the ongoing trade war," Mr Bin Sulayem said.

The ports operator, which has terminals from Hong Kong to Peru, has joined Emirates Skycargo, Dubai Airports and International Humanitarian City in an alliance to distribute Covid-19 vaccines more quickly and efficiently.

DP World has signed a series of agreements with Israeli companies after the UAE and Israel normalised relations last September. Trade between Dubai and Israel in the five months between September to January reached Dh1bn, according to Dubai Customs statistics.

DP World, which listed in 2007 on the Nasdaq Dubai, returned to full state ownership in 2020.