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DP World predicts lower profits on container volume decline

DP World predicts lower profits on container volume decline

Dubai:  Port operator DP World, a subsidiary of Dubai World, announced an 8% decline in container volumes at its 28 consolidated terminals, which handled 25.6m teu over 2009, which is expected to impact the company's bottom line.

Excluding the contribution from new terminals which joined the company portfolio during 2009, volumes declined by 10% (having been down 13% in the first half).   The total decline for DP World's complete portfolio of 50 operational terminals was 6% as final group volumes rested at 43.m teu. Its American and Australian terminals experienced the biggest decrease - showing a 15% decline to 3.5m teu from the 4.1m teu seen the year before.

"2009 has been a very challenging year for container port operators and we are pleased that we have delivered somewhat better results than the industry due to our focus on emerging markets which have remained more resilient to the global downturn," Mohammed Sharaf (pictured), DP World chief executive, pointing out that the industry as a whole reported a decline of almost 12% in container volumes.

"Our 8% decline in volumes will lead to a decline in full year profit before tax against the same period last year; however management's focus on cost cutting and maintaining revenues has mitigated the downside and we expect to report 2009 results in line with expectations.

"As anticipated, all our regions handled more containers in the second half of 2009 than in the first half and the early signs of stability seen in the third quarter have continued into the final quarter of the year. Customer confidence, whilst improving, remains fragile with limited visibility for the medium term.

 "We remain confident about the long term outlook for the container terminal industry and our strong competitive position within it. Whilst we have seen a better performance in the second half of 2009, predicting global trade trends in 2010 remains challenging, and whilst we expect to see container volumes improve we will continue to remain focused on growing revenues and managing costs to drive EBITDA forwards."  [26/01/10]