REG - DP World Limited - DP WORLD ANNOUNCES RESILIENT 1H2023 RESULTS
17/08/2023 08:15
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RNS Number : 6222J DP World Limited 17 August 2023
DP WORLD ANNOUNCES RESILIENT 1H2023 RESULTS
WITH ADJUSTED EBITDA of $2.6 BILLION
Dubai, United Arab Emirates, 17 August 2023: DP World Limited today announces
resilient financial results for the first six months to 30 June 2023. On a
reported basis, revenue grew by 13.9% to $9,037 million and adjusted EBITDA(5)
grew by 7.0% to $2,611 million with adjusted EBITDA margin(6) of 28.9%.
Results before separately disclosed items1 1H 2023 1H 2022 As reported % change Like-for-like
unless otherwise stated
% change2 (#_ftn2)
Gross throughput 3 (TEU '000) 39,858 39,488 +0.9% +3.1%
Consolidated throughput(( 4 )) (TEU '000) 23,005 22,918 +0.4% -1.5%
Revenue 9,037 7,932 +13.9% +7.1%
Share of profit from equity-accounted investees 82 84 -1.9% +28.6%
Adjusted EBITDA(( 5 )) 2,611 2,441 +7.0% +5.3%
Adjusted EBITDA margin 6 28.9% 30.8% - 30.8%
EBIT 7 1 ,603 1,481 +8.2% +6.1%
Profit for the period 885 884 +0.1% +1.4%
Profit for the period attributable to owners of the Company 651 721 -9.7% +33.3%
Results Highlights
Ø Revenue increased by 13.9% to $9,037 million
§ Revenue growth of 13.9% is mainly attributable to the full six months
consolidation of Imperial Logistics (2022 - 4 months).
§ Like-for-like growth driven mainly from strong performance of Imperial
Logistics in Africa and Drydocks World in UAE.
Ø Adjusted EBITDA increases 7.0% to $2,611 million
§ Adjusted EBITDA grew 7.0% on higher revenue growth and EBITDA margin for
the year stood at 28.9%. Like-for-like adjusted EBITDA margin stood at 30.8%.
Ø Cash generation remains robust, Balance sheet strong
§ Net cash generated from operating activities stood at $1,951 million 1H
2023 (compared to $1,931 million in 1H 2022).
§ Leverage (Net debt to adjusted EBITDA) on a pre-IFRS16 basis stands at 2.8x
(FY2022: 2.7x). On a post-IFRS16 basis, net leverage stands at 3.2 times
compared to 3.0 times in FY2022.
Ø DP World credit rating improves to BBB+ with Stable Outlook
§ DP World's credit rating improved by two notches by Fitch to BBB+ with
Stable Outlook and one notch by Moody's to Baa2 with Stable Outlook on
improved financial performance and a stronger balance sheet.
§ DP World is committed to a strong investment grade rating in the medium
term.
Ø Selective investment in key growth markets
§ Capital expenditure of $910 million ($741 million in 1H 2022) was invested
across the existing portfolio.
§ Capex split: $412 million Ports and Terminals, $284 million Logistics and
Parks and Economic Zones, $187 million Marine Services and $27 million in Head
Office.
§ Capital expenditure guidance for 2023 is for approximately $2.0 billion to
be invested in UAE, Jeddah (Saudi Arabia), London Gateway (United Kingdom),
Dakar (Senegal), Callao (Peru) and DPW Logistics (South Africa).
Ø DP World focused on driving revenue synergies and building long-term
relationships with cargo owners
§ Enhanced logistics portfolio offers value-add capabilities in fast-growing
markets and verticals.
§ DP World aims to deliver supply chain solutions to cargo owners by
leveraging its best-in-class infrastructure
§ Group is well-positioned to capitalize on the growing demand for customised
solutions in the logistics industry.
Ø Committed to transition to net zero in line with UAE 2050 Initiative
§ Investment in renewable energy through the I-REC program has resulted in
47% reduction in DP World UAE carbon emissions.
§ Committed to investing more than $500 million to reduce CO(2) emissions by
700k tonnes in the next 5 years.
Ø Resilient 1H 2023 performance, outlook remains uncertain
§ Solid 1H 2023 performance but outlook remains uncertain due to geopolitics,
inflationary environment, higher interest rates and currency fluctuations.
§ DP World remains positive on the medium to long-term outlook for global
trade and is focused on delivering integrated supply chain solutions to cargo
owners to drive sustainable returns.
DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented:
We are pleased to share a resilient set of results for the first half of 2023,
with our adjusted EBITDA enhancing by 7.0% to surpass $2.6 billion. Despite
facing a softer container market and weakened freight rates amid challenging
economic conditions, our focus on high-margin cargo, end-to-end bespoke supply
chain solutions and cost optimization has been crucial in securing these
results. This strategy has not only been effective during these challenging
times but also lays the foundation for our sustainable long-term growth and
returns.
Our logistics vertical has demonstrated robustness in this demanding economic
landscape, attracting more cargo owners to our platform. The positive feedback
to our end-to-end product emphasis the value of our customised solutions
enables customers to conduct trade more effectively. Strategic investments in
high-growth sectors enable us to provide value-added solutions, and we remain
committed to continuously enhancing our logistics platform. This includes
addressing supply chain inefficiencies and enhancing connectivity in crucial
trade lanes to serve cargo owners better.
Notably, we continue to make substantial progress towards our 2050 net zero
carbon target. Our recent investment in renewable energy through the I-REC
program has significantly cut DP World UAE business carbon emissions by 47%.
We are confident of achieving our goal to cut CO2 emissions by 700k tonnes
which accounts for approximately 22% of our total emission within the next
five years.
In summary, our balance sheet remains robust, and we continue to generate high
levels of cash flow, which provides us the flexibility to invest in the growth
of our existing portfolio and new investment opportunities when they arise.
While the near-term trade outlook may be uncertain due to macroeconomic and
geopolitical factors, the solid financial performance of the first six months
positions us well to deliver a steady set of full-year results. We remain
optimistic about the medium to long-term prospects of the industry and DP
World's capacity to consistently generate sustainable returns.
- END -
Investor Enquiries
Redwan Ahmed
Amin Fikree
DP World
Limited
DP World Limited
Mobile: +971 50 554 1557
Mobile: +971 56 6811553
Direct: +971 4 808 0842
Direct : +971 4 808 0923
Redwan.Ahmed@dpworld.com (mailto:Redwan.Ahmed@dpworld.com)
Amin.Fikree@dpworld.com
17th August 4:00pm UAE, 1:00pm UK Call with Video Conference
Ø Conference call for analysts and investors hosted by Yuvraj Narayan, Group
Deputy CEO & CFO and Board Member.
Ø A playback of the call will be available after the conference call
concludes. For the dial in details and playback details please contact
investor.relations@dpworld.com.
The presentation accompanying the conference call will be available on DP
World's website within the investor centre under Financial Results on
https://www.dpworld.com/investor-relations/financials-presentation/investor-presentations
(https://www.dpworld.com/investor-relations/financials-presentation/investor-presentations)
from approximately 9am UAE time.
Forward-Looking Statements
This document contains certain "forward-looking" statements reflecting, among
other things, current views on our markets, activities, and prospects. By
their nature, forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances that may or may not occur and
which may be beyond DP World's ability to control or predict (such as changing
political, economic or market circumstances). Actual outcomes and results may
differ materially from any outcomes or results expressed or implied by such
forward-looking statements. Any forward-looking statements made by or on
behalf of DP World speak only as of the date they are made and no
representation or warranty is given in relation to them, including as to their
completeness or accuracy or the basis on which they were prepared. Except to
the extent required by law, DP World does not undertake to update or revise
forward-looking statements to reflect any changes in DP World's expectations
with regard thereto or any changes in information, events, conditions or
circumstances on which any such statement is based.
Group Chairman and CEO Statement
Resilient performance in challenging markets
The global economy in 2023 faces numerous challenges, including slowing
growth, inflationary pressures, higher interest rates, currency fluctuations,
and heightened geopolitics. Due to this weak economic backdrop, trade growth
was forecast to soften in 2023, leading to a marginal decline in container
volumes as consumers tightened their belts. Additionally, supply chain
bottlenecks that emerged post-COVID began to unwind in the second half of
2022, causing freight rates to return to pre-COVID levels and resulting in
weaker growth for logistics.
Despite these challenges, our business demonstrated remarkable resilience.
Achieving like-for-like growth in a declining market is a testament to the
hard work of our team.
Robust performance in Ports & Terminals
DP World containers volumes increased by 3.1%(( 8 (#_ftn8) )) compared to a
market decline of 2.0%(( 9 (#_ftn9) )) as our portfolio once again
outperformed the industry, which demonstrates that we have relevant capacity
in the right locations. A strong performance from Asia Pacific was the key
driver of growth, while Americas and Europe were softer due to the weaker
economic environment. Encouragingly, Jebel Ali (UAE) continues to deliver a
steady performance.
Our strategic approach of adding capacity in high-margin cargo locations and
investing in automation continues to be a key differentiator as we continue to
focus on markets with strong supply-demand dynamics.
Logistics continues to deliver growth
In our Logistics vertical, we have focused on driving revenue synergies and
adding new capabilities, which has resulted in new business opportunities.
Furthermore, we have worked tirelessly on cost efficiencies which has helped
protect margins in this inflationary period.
DP World continues to remove inefficiencies across the supply chain to provide
improved connectivity in fast-growing trade lanes. The demand for bespoke
supply chain solutions continue to rise as cargo owner's demands shift, and DP
World is well placed to benefit from these developments.
In terms of innovation, we have developed new products like Cargoes Flow, DP
World Trade Finance, and Cargoes Logistics, making trade easier for cargo
owners, especially SMEs. Our commitment to building intelligent platforms for
efficient solutions remains steadfast.
Marine Services providing critical connectivity
Our Marine Services vertical, particularly Unifeeder, which offers efficient
and sustainable transport solutions, continues to provide critical
connectivity for shipping lines and cargo owners. While near-term
profitability was impacted by freight rates returning to pre-COVID levels due
to unwinding supply chain bottlenecks, strong performances from Drydocks World
and P&O Maritime Logistics have offset some of the weakness.
We have expanded our Marine Services business in new geographies in recent
years, including Asia, the wider Indian Subcontinent, the Middle East, and
Latin America. This expansion has enabled us to serve our customers better,
increase our market share, and offer more opportunities for growth.
Decarbonisation is a core focus as we transition to net zero by 2050
Decarbonization is a core focus as we transition to achieve net zero carbon
emissions by 2050. In line with our 'Our World, Our Future' sustainability
strategy, we are committed to building, protecting, and maintaining DP World's
sustainable operations, economically, socially, and environmentally. Notably,
we have achieved a significant 47% reduction in DP World's UAE carbon
emissions through our renewable energy program. Our efforts have been
recognized, earning us a top performer ranking by Sustainalytics and a
leadership score (A-) from the CDP Climate Change submission.
To continue our progress, we have committed to investing over $500 million in
cutting CO2 emissions by 700k in the next 5 years, which accounts to
approximately 22% of our total emissions. However, we acknowledge that there
is more to achieve, and we remain steadfast in our determination to reach the
net zero target by 2050, aligning with the UAE's 2050 strategic initiative.
Group Deputy CEO & CFO Review
DP World has delivered a robust set of first half 2023 results with steady
adjusted EBITDA growth of 7.0% to $2,611 million. The adjusted EBITDA margin
remained broadly stable as our cost optimization projects help protect
profitability.
Reported revenue grew by 13.9% to $9,037 million as the Group benefitted from
the full year contribution of acquisitions while like-for-like revenue grew by
7.1% driven by growth in Logistics as our revenue synergy plans begin to
attract new customers. Operating profit grew by 8.2% to $1,603 million which
was also up 6.1% on a like-for-like basis.
The strengthening of DP World's balance sheet in 2022 has resulted in the
Company's credit rating being upgraded by Fitch by two notches to BBB+ with a
Stable outlook while Moody's upgraded by one notch to Baa2 with Stable
Outlook.
Asia Pacific and India
Results before separately disclosed items 1H 2023 1H 2022 % change Like-for-like
USD million % change
Consolidated throughput (TEU '000) 5,017 4,976 +0.8% +0.8%
Total revenue 1,094 1,316 -16.9% -15.3%
Share of profit from equity-accounted investees 57 47 +20.8% +42.1%
Adjusted EBITDA 315 552 -42.9% -41.3%
Adjusted EBITDA margin 28.8% 41.9% -13.1% 29.0%
Net profit after tax 145 401 -63.9% -62.8%
Capex 85 76 -12.3% -
As anticipated, the Asia Pacific and India financials was impacted by a weaker
performance in Marine Service (Unifeeder ISC) which saw its profitability
decline due to lower freight rates. The unwinding of supply chain bottlenecks
has resulted in the normalisation of ocean freight rates to pre-covid levels.
We anticipate more stability in future performance. In contrast, Ports and
Terminals delivered a robust performance with the focus on high margin cargo
continuing to drive growth in profitability.
Overall, revenue declined by 16.9% on a reported basis which resulted in
adjusted EBITDA of $315 million.
We invested $85million in Asia Pacific & India, mainly focused in Cochin
& Logistics business in India.
Middle East, Europe and Africa
Results before separately disclosed items 1H 2023 1H 2022 % change Like-for-like
USD million % change
Consolidated throughput (TEU '000) 12,602 12,370 +1.9% -1.5%
Total revenue 6,528 5,195 +25.7% +14.2%
Share of profit from equity-accounted investees 18 32 -43.2% -7.1%
Adjusted EBITDA 2,060 1,674 +23.1% +20.1%
Adjusted EBITDA margin 31.6% 32.2% -0.7% 34.6%
Net profit after tax 1,421 1,047 +35.8% +32.4%
Capex 681 491 -38.7% -
We saw a strong performance in Middle East, Europe and Africa region aided by
Logistics. Our focus on revenue synergies continues to attract new customers,
while our cost optimisation projects have protected profitability. Performance
of Ports and Terminal was steady as a solid performance in Middle East and
Africa compensated softer volumes in Europe. Marine Services performance was
bolstered by a strong performance at Drydocks World (DDW) and P&O Maritime
and Logistics (POML) due to new contract wins and higher charter rates.
Improvements at P&O Ferries also contributed to the uplift.
Total reported revenue increased by 25.7% to $6,528 million mainly
attributable to the full six months consolidation of Imperial Logistics (2022
- 4 months) while like-for-like revenue grew 14.2%. Adjusted EBITDA reached
$2,060 million, up 20.1% on a like-for-like basis. EBITDA margins remained
healthy at above 30%.
We invested $681 million region, mainly in UAE, Imperial Logistics (Africa),
Jeddah (Saudi Arabia), Sokhna (Egypt), London Gateway (UK) and Constanta
(Romania).
Australia and Americas
Results before separately disclosed items 1H 2023 1H 2022 % change Like-for-like
USD million % change
Consolidated throughput (TEU '000) 5,386 5,573 -3.3% -3.3%
Total revenue 1,416 1,422 -0.4% +2.2%
Share of profit from equity-accounted investees 6 4 +63.3% +73.4%
Adjusted EBITDA 441 478 -7.8% -8.6%
Adjusted EBITDA margin 31.1% 33.6% -2.5% 31.2%
Net profit after tax 252 304 -17.0% -19.6%
Capex 117 162 +27.4% -
Market conditions in the Australia and Americas have demonstrated mixed
trends. The performance of Ports and Terminals in the Americas has been
affected by softer consumer demand. In contrast, Australia has shown
resilience amidst these challenges and has maintained a more robust
performance. Meanwhile, the Logistics segment in these regions has exhibited
steady performance. While there are complexities in the current market
conditions, we continue to adapt and strive to maintain our solid performance.
Total reported revenue was broadly flat at $1,416 million, while adjusted
EBITDA declined by 7.8% to $441 million. EBITDA margins remained at above 30%.
We invested $117 million in capital expenditure in Australia & Americas,
mainly in Callao (Peru), syncreon (USA), Caucedo (Dominican Republic).
Cash Flow and Balance Sheet
Adjusted gross debt (excluding bank overdrafts and loans from non-controlling
shareholders) stands at $19.2 billion compared to $18.5 billion as of 31
December 2022. Lease and concession fee liabilities account for $4.5 billion,
with interest-bearing debt of $14.7 billion as of 30 June 2023. Cash and
cash-equivalents on the balance sheet stood at $3.4 billion, resulting in net
debt of $15.8 billion or $11.3 billion (on a pre IFRS 16 basis). Our net
leverage (adjusted net debt to adjusted EBITDA) stands at 3.2 times on
post-IFRS16 basis and would be 2.8x on pre-IFRS16 basis. Cash generation
remained solid, with cash from operations steady at $2.5 billion (1H 2022:
$2.2 billion).
Capital Expenditure
Consolidated capital expenditure in the first half of 2023 was $910 million,
with maintenance and replacement capital expenditure of $298 million. We
expect the full-year 2023 capital expenditure to be approximately $2.0
billion, which will be invested in UAE, Jeddah (Saudi Arabia), London Gateway
(United Kingdom), Dakar (Senegal), Callao (Peru), Marine Services (P&O
Ferries) and Imperial Logistics (South Africa).
Net finance costs before separately disclosed items
The net finance cost for the six months increased to $505 million compared to
prior period at $373 million. Increase is mainly due to higher average debt
and increase in effective interest rates during the period.
Taxation
The tax expense relates to the tax payable on the profit earned by overseas
subsidiaries, as adjusted in accordance with the taxation laws and regulations
of the countries in which they operate. For the first six months of 2023, DP
World's income tax expense before separately disclosed items was $213 million
(1H 2022: $224 million).
DP World UAE subsidiaries are subject to UAE corporation tax from 1 January
2024 even though UAE CIT legislation is now in force. No deferred tax is
recognized in 1H 2023 in relation to Group level adjustments pending further
clarifications from the relevant UAE tax authorities.
Profit attributable to non-controlling interests (minority interests)
Profit attributable to non-controlling interests (minority interests) before
separately disclosed items was $235 million against 1H 2022 of $163 million
mainly due to increase in minority interests in Jebel Ali (UAE).
Sultan Ahmed Bin Sulayem Yuvraj Narayan
Group Chairman and Chief Executive Officer Group Deputy CEO & CFO
DP WORLD 1H2023 THROUGHPUT
DP World handled 20.3 million TEU (twenty-foot equivalent units) across its
global portfolio of container terminals in the second quarter of 2023, with
gross container volumes increasing by 0.5% year-on-year on a reported basis
and 2.6% on a like-for-like basis.
In the first half of 2023, DP World handled 39.9 million TEU on a gross basis
with container volumes increasing by 0.9% year-on-year on a reported basis and
up 3.1% on a like-for-like basis. Jebel Ali (UAE) handled 3.6 million TEU in
2Q2023, on par year-on-year.
At a consolidated level, our terminals handled 11.6 million TEU in 2Q2023 up
0.1% on a reported basis and down 1.7% like-for-like basis. In the first
half of 2023, DP World handled 23.0 million TEU, with container volumes
increasing by 0.4% year-on-year on a reported basis and decreased 1.5% on a
like-for-like basis.
Gross Volume 2Q 2Q % Growth 1H 1H % Growth
'000 TEU 2023 2022 (like for like) 2023 2022 (like for like)
Asia Pacific & India Subcontinent 9,862 9,159 +7.7% 19,234 17,611 +9.2%
(+7.7%) (+9.5%)
Europe, Middle East and Africa* 7,657 8,174 -6.3% 15,071 16,167 -6.8%
(-1.3%) (-1.9%)
Americas & Australia 2,802 2,891 -3.1% 5,554 5,711 -2.7%
(-3.1%) (-2.7%)
Total Group 20,321 20,224 +0.5% 39,858 39,488 +0.9%
(+2.6%) (+3.1%)
*Jebel Ali Volumes included in Middle East, Africa and Europe region 3,558 3,560 +0.0% 7,059 6,983 +1.1%
(+0.0%) (+1.1%)
Consolidated Volume 2Q 2Q % Growth 1H 1H % Growth
'000 TEU 2023 2022 (like for like) 2023 2022 (like for like)
Asia Pacific & India Subcontinent 2,493 2,501 -0.4% 5,017 4,975 +0.8%
(-0.4%) (+0.8%)
Europe, Middle East and Africa* 6,368 6,248 +1.9% 12,602 12,370 +1.9%
(-1.3%) (-1.5%)
Americas & Australia 2,730 2,831 -3.6% 5,386 5,573 -3.3%
(-3.6%) (-3.3%)
Total Group 11,590 11,580 0.1% 23,005 22,918 +0.4%
(-1.7%) (-1.5%)
About DP World:
Trade is the lifeblood of the global economy, creating opportunities and
improving the quality of life for people around the world. DP World exists to
make the world's trade flow better, changing what's possible for the customers
and communities we serve globally.
With a dedicated, diverse and professional team of more than 106,500 employees
from 158 nationalities, spanning 73 countries on six continents, DP World is
pushing trade further and faster towards a seamless supply chain that's fit
for the future.
We're rapidly transforming and integrating our businesses -- Ports and
Terminals, Marine Services, Logistics and Technology - and uniting our global
infrastructure with local expertise to create stronger, more efficient
end-to-end supply chain solutions that can change the way the world trades.
What's more, we're reshaping the future by investing in innovation. From
intelligent delivery systems to automated warehouse stacking, we're at the
cutting edge of disruptive technology, pushing the sector towards better ways
to trade, minimising disruptions from the factory floor to the customer's
door.
WE MAKE TRADE FLOW
TO CHANGE WHAT'S POSSIBLE FOR EVERYONE
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1 Before separately disclosed items (BSDI) primarily excludes non-recurring
items. DP World reported separately disclosed items of $17.8 million profit
for the period.
2 Like-for-like at constant currency is without the consolidation of
Imperial Logistics, Eurofos and removal of Cargoes Finance, Logistics in
Jeddah and Turkey and divestment in Yantai and Le Havre.
3 Gross throughput is throughput from all consolidated terminals including
equity-accounted investees.
4 Consolidated throughput is throughput from all terminals where the Group
has control as per IFRS.
5 Adjusted EBITDA is Earnings before Interest, Tax, Depreciation &
Amortisation including share of profit from equity-accounted investees before
separately disclosed items.
6 Like-for-like adjusted EBITDA margin.
7 Adjusted EBITDA less Depreciation and Amortization.
8 Gross, like-for-like
9 Drewry estimates
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