DP World records stable EBITDA of US$5.1bn despite uncertain market environment

DP World saw its adjusted EBITDA increase by 2% to US$5.1bn across the year and remained resilient against market challenges caused by high inflation and escalating geopolitical tensions.

Revenue rose by 7% to US$18.3bn but profit for the year fell by 18% to US$1.5bn due to higher finance costs.

Container volumes increased by 3%, outperforming a flat market, with strong performance in Asia Pacific, India and Middle East but the Americas and Europe were impacted by a weaker economic environment.

In the ports and terminals segment, the adjusted EBITDA grew by 8% to US$3.3bn and revenue increased by 5% to US$6.4bn.

In 2023, DP World invested US$1bn in strategic locations including Jeddah, London Gateway, Jebel Ali and Callao.

Sultan Ahmed bin Sulayem, DP World Group chairman and CEO, said: “We are pleased to report stable results, with adjusted EBITDA increasing by 2% to US$5.1bn. This achievement is particularly noteworthy considering the significant challenges posed by a deteriorating geopolitical landscape and challenging macroeconomic conditions.

“Our strategic focus on high-margin cargo, end-to-end integrated supply chain solutions, and diligent cost optimisation have played a pivotal role in securing these results. Not only has this strategy proven effective during these testing times, but it also lays a solid foundation for our sustainable long-term growth and returns.”

In the logistics segment, DP World performed strongly with adjusted EBITDA up by 21% to US$1.5bn and revenue rose by 15% to US$7.9bn.

This was helped by the consolidation of the acquisition of Imperial logistics and land sales at Dubai Maritime City, as well as the performance of Jebel Ali Freezone which has exceeded a customer base of 10,000.

Additionally, DP World invested US$638m into logistics expansion projects in India, Africa, UAE and Europe and unveiled new products and services, including Cargoes Flow, DP World Trade Finance and Cargoes Logistics, to help streamline the trading process for cargo owners.

Bin Sulayem said: “Our logistics businesses have demonstrated resilience in this demanding economic landscape, attracting a growing number of cargo owners to our platform. The positive feedback for our end-to-end products underscores the value of our customised solutions, empowering cargo owners to conduct trade more efficiently.

“Strategic investments in high-growth sectors enable us to offer value-added solutions, and we remain committed to continually enhancing our logistics platform. This includes addressing supply chain inefficiencies and improving connectivity in critical trade lanes to better serve cargo owners.”

Freight rates returning to normal levels affected profitability in the marine services segment, as adjusted EBITDA declined by 28% to US$840m and revenue fell by 6% to US$3.9bn.

He added: “Overall, we delivered a steady performance in 2023, and despite the uncertain start to 2024 with the ongoing Red Sea crisis, our portfolio has continued to demonstrate resilience. The outlook remains uncertain due to the challenging geopolitical and economic environment.

“Nevertheless, we anticipate our portfolio will sustain robust performance, and we maintain a positive outlook on the medium to long-term fundamentals of the industry and DP World’s capacity to deliver sustainable returns consistently.”

During the year, the company saw its Scope 1 and Scope 2 carbon emissions fall by 13%, while it has committed to investing more than US$500m to reduce CO2 emissions in the next five years.

For 2024, capital expenditure is expected to be US$2bn, which will be mainly invested in Jebel Ali (UAE), London Gateway (United Kingdom), Inland logistics (India), Dakar (Senegal), East Java (Indonesia), Callao (Peru) and Jeddah (Saudi Arabia).

Source: Container-mag

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