DP World sees modest growth but continues to expand Jebel Ali

2013 was a rather flat year for Dubai Ports World. Figures released yesterday show ‘like-for-like’ gross volumes (which includes terminals which the company has financial holdings in) increased only 0.7% over the year once the effects of new investments and divestments are taken into account. However, beneath the surface the situation was more dynamic with significant growth emerging in the second half of the year. Total volumes were 54.9m Twenty Foot Equivalent Units (TEU) on a gross basis and 26m on a consolidated basis.

The complex of ports at the United Arab Emirates (UAE), including DP World’s largest terminal at Jebel Ali, saw annual growth of gross volumes of 2.7% reaching a total of 13.6m twenty-foot equivalent units.

DP World’s ports in the ‘Asia-Pacific and India Sub-continent’ region saw underlying growth of gross volumes of 1.7% whilst the ‘America’s and Australia’ increased by 0.4% for the year. The picture for ‘Europe, Middle East and Africa’ is less transparent. The area saw an underlying fall of 2.4% but this includes the growth at the UAE ports, suggesting that African and particularly European ports fell significantly, although DP World described the situation there as showing “signs of stability”.

Unsurprisingly DP World is continuing to adapt its portfolio to changing trade patterns and volumes. It has continued to rationalise a considerable part of its investments in parallel with substantial investment in new capacity. The latter includes new ports in the UK and Brazil combined with a new terminal in Jebel Ali which alone will account for a further 4m TEU.

Group Chief Executive Mohammed Sharaf observed that, “Limited spare capacity across our portfolio constrained our ability to grow volumes further in 2013. However the addition of new capacity in 2014 combined with a projected pick-up in global trade should allow us to return to a more normalised growth rate.” Therefore it may be the case that the underlying demand picture is stronger than these volume numbers suggest, although the picture elsewhere shows that container shipping growth is not huge.

What does appear to be the case is that DP World’s key asset of Jebel Ali remains one of the most dynamic ports in the global market, able to tap into trans-shipment traffic in a wide selection of markets.