DP World posts a strong first half as its customers wallow in an ocean of red ink
DP World saw revenue jump 14.4%, year on year, in the first six months to ...
Container terminal operator DP World handled a record 70.1m teu at its global facilities last year – 10.1% more boxes than in 2016.
On a like-for-like basis, the world’s third-biggest operator increased its container throughput by 9.7% in 2017 at its 78 marine and inland terminals.
This it claimed put it ahead of Drewry’s 6% growth estimate for the liner industry.
However, on a consolidated level, at terminals where DP World has majority ownership or operational control, the throughput increase was lower, at 6.2%, at 36.5m teu.
DP World chairman and chief executive Sultan Ahmed Bin Sulayem said: “Benefiting from the improved trading environment and market share gains, our global portfolio once again delivered ahead of market growth in 2017 and has seen a strong performance across all the regions.”
In his Q3 report, Mr Bin Sulayem attributed some of the market share gain to the carrier alliance reshuffle last April last year. But the formation of three stronger alliances, and the rush of mergers and acquisitions among carriers, has led to downward pressure on stevedoring rates.
And the merger this April of the container businesses of Japanese carriers K Line, MOL and NYK will see the new Ocean Network Express (ONE) demand the lowest rate previously enjoyed by the trio and a further discount for the new total volume.
DP World saw an 11.5% jump in its Europe, Middle East and Africa region throughput to 29.4m teu, but recorded a more modest 7.9% growth in the Asia Pacific and India sub-continent region to 31.9m teu, while its third and smallest sector, the Americas and Australia, witnessed a 13.8% surge in container throughput to 8.8m teu.
Mr Bin Sulayem added: “As we look ahead into 2018, we expect to grow ahead of the market and see increased contributions from our new developments.”
Although reiterating DP World’s strategy to “continue to seek opportunities in complementary sectors in the global supply chain”, Mr Bin Sulayem said the group’s capital expenditure discipline would be maintained “by bringing capacity in line with demand”.
Market leader Hutchison Ports has yet to publish its 2017 throughput, after achieving 81.4m teu across its global terminals in 2016, and PSA’s container throughput reached 74.3m teu last year, including a 10.4% increase at its facilities outside Singapore.
The fourth-ranked operator, APM Terminals, will report its full-year numbers on Friday, but at the Q3 stage, it said it was 6.5% ahead of the previous year, on 29.4m teu, having experienced “challenging market conditions”.
Commenting on the DP World operational result, Neil Davidson, senior analyst, ports & terminals for Drewry, said: “The like-for-like consolidated growth was pretty much in line with our global throughput growth expectation for 2017.”
But with DP World’s gross volume up around 10%, he acknowledged there had been some market share gain.
“I think DP World will have benefited from strong market growth in 2017 in locations such as India, China, Canada and Latin America in particular,” said Mr Davidson.