The container terminal giant DP World has announced strong numbers for the past year but has also pointed to a development of its strategy beyond the operation of terminals.
On the back of container volumes increasing by 10.1% on a consolidated basis, revenue was up 13.2%. Profits also increased, with EBITDA up 9.1% and ‘profit for the period’ up 8.2% to US$1,363m. EBITDA margin was 52.4%.
DP World claimed that this represented a considerable increase in market share, citing Drewry’s figure of 6% for the overall growth in container port volume increase. DP World said that it was experiencing growth broadly across the world, “from all three regions”.
The business made considerable acquisitions to its portfolio over 2017, including “new units” at Berbera in Somaliland, Limassol, Saint John, CXP in Peru, Yarimca in Turkey, Kigali, Posorja in Ecuador and increases in equity at PNC in South Korea and Santos in Brazil.
A notable development was the comments by DP World’s CEO Sultan Ahmed Bin Sulayem that “in recent years, we have leveraged on our in-house expertise to extend our core business into port-related, maritime, transportation and logistics sectors with the objective of diversifying our revenue base and connecting directly with the owners of cargo and aggregators of demand to remove inefficiencies in trade, improve the quality of our earnings and drive returns”.
The immediate effect of this strategy is two recent acquisitions on Sunday 18; the purchase of the Peruvian port, warehousing and transport company Cosmos Agencia Maritima for US$315.7m and India’s Continental Warehousing Corporation for an undisclosed sum.
Effectively, DP World is evolving into more of a diversified logistics service provider, looking to build on its presence in emerging markets such as South America or India to develop inland logistics capabilities. It will be interesting to see how far this goes.
Source: Transport Intelligence, March 20, 2018
Author: Thomas Cullen
