DP World comes in better by volumes

The company's container shipments are down 10 per cent but worldwide port industry sees a 15 per cent drop.

DP World's business has held relatively steady in the face of the global financial crisis.

Container handling volumes at DP World fell 10 per cent in the first half of this year across its network of ports worldwide as the economic downturn devastated global trade. "The first six months of 2009 have seen some of the most challenging operating environments our industry has ever known," said Mohammed Sharaf, the chief executive of DP World, the world's fourth-largest ports operator.

"Unpredictable" trade trends are also continuing in the second half of the year, Mr Sharaf said. DP World's UAE operations, including its flagship port in Jebel Ali, were the least affected, reporting a 7 per cent decline in volumes to 5.4 million standard containers (TEUs) in the first half. DP World handled 12.3 million TEUs between January and June at its consolidated terminals, or facilities in which it owned a majority stake, a 10 per cent decline.

Overall, it handled more than 20 million TEUs across the 49 terminals it operates and manages. The lower results were nonetheless a bright spot for the ports industry, which saw a 15 per cent drop in container shipments in the first half of the year, according to HSBC. Robin Byde, a London-based analyst at the bank, said DP World performed according to expectations. Some of DP World's rivals are reporting steeper declines at the same time as the global economy is forecast to contract 1.4 per cent this year, with a 9 per cent fall in global trade.

Shipping, the workhorse of international trade, has been worst affected, with firms laying up ships and offering cut-rate prices to carry containers between Asia and Europe. One in 10 containers worldwide sits empty, according to Singamas Container Holdings, the world's second-largest maker of sea-cargo boxes. In Singapore, a major Asian shipping centre and home to DP World's global rival, PSA, container handling fell 18 per cent in the first half of the year, from 15 million TEUs to 12.3 million, according to the Maritime and Port Authority of Singapore.

Another of DP World's main rivals, Hutchison Port Holdings, said volumes in the first two months of this year, the latest data available, were down 9 per cent. DP World said its results were above average because it had focused on emerging markets that had been less affected by macroeconomic trends, in particular the Middle East and Africa. The throughput results would cause a drop in first-half profits, Mr Sharaf said.

These are scheduled to be announced on August 26. At its consolidated terminals, throughput in Europe, the Middle East and Africa fell 9 per cent, from 8.7 million to 7.9 million containers. The Americas and Australia regions saw volumes fall from 1.9 million to 1.6 million containers, a 16 per cent drop. Asia-Pacific and the Indian subcontinent fell 10 per cent, from 3 million TEUs to 2.7 million.

Mr Sharaf predicted more pain ahead for the industry. "The unpredictable trends in global trade we have seen in the first half of the year continue into the second half of the year," he said. "Our terminals remain very focused on cost-cutting and improving efficiencies to minimise the impact of declining volumes on profitability. "We are also ensuring that our portfolio emerges in a highly competitive position to benefit from recovery in global trade."