DP World Records Massive 2016 Profit
DP World has announced very strong financial results for 2016, with profits surging around 28% as it topped US$1 billion for the first time.
On a reported basis, revenue grew 4.9% and adjusted EBITDA increased 17.4%, with an adjusted EBITDA margin of 54.4%.
On a like-for-like basis, revenue grew 1.3%, adjusted EBITDA increased by 6.6% with adjusted EBITDA margin of 52.6%, and attributable earnings increased 6.2%.
Revenue growth of 4.9% has been supported by a full year contribution of the Jebel Ali Free Zone (UAE) and Prince Rupert in Canada.
DP World also secured volume growth of 0.4%, despite challenging market conditions.
Despite the majority of 2016 being characteristically turbulent for the global economy, Q4 2016 did see some green shoots with Maersk Line, Hapag-Lloyd and CMA CGM reporting growth for the period.
In 2016, containerized revenue per TEU grew 4.0% for DP World, while total revenue per TEU grew by 3.0% on a like-for-like.
DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, said: “We are pleased to announce another set of strong financial results for 2016, as we delivered earnings in excess of $1 billion and above 50% EBITDA margins for the full year for the first time.
“Encouragingly, our volumes have continued to grow ahead of the market with gross volumes growing 3.2% vs. Drewry full year market estimate of 1.3% [sic].
“This is pleasing given the significant challenges parts of our portfolio have faced, and once again demonstrates the resilient nature of our diversified portfolio. Disciplined investment throughout the economic cycle has been one of the keys to delivering consistent growth and in 2016, we invested $1,298 million across our portfolio in markets with strong demand and supply dynamics.
“While 2017 is expected to be another challenging year for global trade, we have made an encouraging start to the year and we expect to continue to deliver ahead-of-market volume growth.
“Our aim is to continue our disciplined approach to capital allocation in markets with strong growth potential while adding complementary or related services to further diversify and strengthen our business.
“The board of DP World recommends increasing the dividend by 26.7% to $315.4 million, or 38.0 US cents per share, reflecting the strong earnings growth in the year. The board is confident of the company’s ability to continue to generate cash and support our future growth whilst maintaining a consistent dividend payout.
“Our significant cash generation and investment partnerships leave us with a strong balance sheet and flexibility to capitalise on the significant growth opportunities in the industry.
“Overall, we continue to believe that a portfolio which has a 70% exposure to origin and destination cargo and 75% exposure to faster growing markets will enable us to deliver enhanced shareholder value over the long term.”
Global container shipping consortium ‘THE Alliance’ recently announced that all of its mainline UK calls will be handled by DP World, creating a union that could become an invaluable safeguard in a turbulent industry climate.