||United Arab Emirates : DP World announces robust financial results revenue growth of 14.4% in first half of 2018
||Global trade enabler DP World today announces robust financial results for the six months to 30 June 2018. On a reported basis, revenue grew 14.4% and adjusted EBITDA increased by 7.9%. Adjusted EBITDA margin was 50.3%, delivering profit attributable to owners of the Company, before separately disclosed items, of $593 million and EPS of 71.5 US cents. On a like-for-like basis, revenue grew 3.0% and adjusted EBITDA increased by 4.2% with adjusted EBITDA margin of 54.4%, and attributable earnings to owners of the Company increased up by 5.2%, reflecting the stable trading environment.
Revenue of $2,626 million (Revenue growth of 14.4% on reported and 3.0% on like-for-like basis)
Revenue growth of 14.4% supported by the volume growth across all three regions and the impact of new acquisitions including Drydocks World LLC (Drydocks), Dubai Maritime City (DMC) and Cosmos Agencia Martima (CAM). Like-for-like revenue increased by 3.0% driven by a 4.6% increase in total containerized revenue.
Adjusted EBITDA of $1,322 million and adjusted EBITDA margin of 50.3% (Like-for-like adjusted EBITDA margin at 54.4%)
Adjusted EBITDA grew 7.9% and EBITDA margin for the half year at 50.3%. Like-for-like adjusted EBITDA grew 4.2% with a margin of 54.4%.
EBITDA margin declined due to the consolidation of lower margin Maritime services businesses.
Profit for the period attributable to owners of the Company of $593 million
Profit attributable to owners of the Company before separately disclosed items dropped 2.1% on a reported basis but grew 5.2% on a like-for-like basis.
Profit declined due to the deconsolidation of Doraleh (Djibouti) and consolidation of DP World Santos (Brazil), which remains in ramp up stage.
Strong Cash generation and robust balance sheet
Cash from operating activities remains strong at $979 million in 1H2018, slightly lower than $1,010 million in 1H2017.
Leverage (Net debt to annualised adjusted EBITDA) increased to 2.9 times from 2.6 times at 1H2017.
DP World was again upgraded by the rating agency Moodys from Baa2 to Baa1 with a stable outlook following the one notch upgrade in 2016. Fitch Ratings also upgraded DP World from BBB to BBB+ in July 2017. Both rating agencies have upgraded DP World by two notches in 2 years.
Continued investment in long-term assets and expansion into complementary sectors
Capital expenditure of $439 million invested across the portfolio during the first half of the year.
Capital expenditure guidance for 2018 remains unchanged at up to $1.4 billion with investments planned into UAE, Posorja (Ecuador), Berbera (Somaliland), Sokhna (Egypt) and London Gateway (UK).
The acquisition of Drydocks, which closed in the beginning of 2018, is performing in line with expectations and we have seen increased contribution to our revenue line. At 1H2018, non-containerized revenue accounted for approximately 37% of total revenue, up from 31% in 1H2017.
Furthermore, DP World continued to invest in complementary sectors and acquired three more strategic assets the integrated multimodal logistics players Continental Warehousing Corporation (CWC) in India, Cosmos Agencia Martima in Peru, and the Unifeeder Group in Denmark, which operates the largest container common user feeder and growing shortsea network in Europe. Also, we have signed a 20-year concession to build and operate a modern logistics hub outside of Bamako, the capital and largest city of the Republic of Mali.
Aside from our investments in complementary sectors, we recently won a 30-year concession for the management and development of a greenfield port project at Banana in the Democratic Republic of the Congo, which despite being Africas third-most populous country, currently has no direct deep-sea port.
Global trade continues to grow but outlook is uncertain
The first half of 2018 continues to see an upswing in global trade with all three regions delivering growth however geopolitical headwinds and recent changes to trade policies continue to pose uncertainty for the container market.
We continue to focus on delivering operational excellence and maintaining our disciplined approach to investment to ensure we remain the port operator of choice as well as strengthening our product offering to play a wider role in the global supply chain as a trade enabler.
DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented:
DP World is pleased to report like-for-like earnings growth of 5.2% in the first half of 2018 and attributable earnings of $593 million. Adjusted EBITDA grew 7.9% to $1,322 million with margins at 50.3% on a reported basis and 54.4% on a like-for-like basis. This robust performance has been delivered in an uncertain trade environment, once again highlighting our operational excellence and the resilience of our portfolio.
We have made good progress in delivering our strategy of strengthening our portfolio of complementary and port related business with approximately $1,400 million, worth of acquisitions announced recently. These acquisitions offer strong growth opportunities and enhance DP Worlds presence in the global supply chain as we continue to diversify our revenue base and look at opportunities to connect directly with the owners of cargo and aggregators of demand.
Our balance sheet remains strong and we continue to generate high levels of cash flow, which gives us the ability to invest in the future growth of our current portfolio, and the flexibility to make new investments should the right opportunities arise. Going forward, we aim to integrate our new acquisitions and we continue to extend our core business into port-related, maritime, transportation and logistics sectors with the objective of removing inefficiencies in global trade, improving the quality of our earnings and driving returns.
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