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DP World takes cautious approach to 2009

DP World takes cautious approach to 2009

Dubai: Leading container port operator DP World said on Monday that it was reviewing all expansion projects, cutting costs and freezing recruitment as growth slows in 2009, writes Reuters. Chief financial officer Yuvraj Narayan said DP World did not believe there would be "pronounced job cuts" but was in no hurry to expand through acquisitions until the market stabilises.

"Under the fast-changing conditions we have initiated a review of all expansion projects that are currently under implementation," he told reporters in a conference call. "We don't have any specific figures in mind. The management has initiated broad measures to cut normal costs like travel ... There is a general freeze on recruitment and a close review of replacements as far as headcounts are concerned."

Volume growth on consolidated terminals grew 10% in the fourth quarter on the same period in 2007, though that was slower than earlier in the year, Narayan said, adding that the results of the expansion review would be completed in a month and the company would announce its results and outlook in March.

DP World, which operates 48 marine terminals and 13 new port developments in 31 countries worldwide, posted a 122% increase in first-half profit in August and said business was accelerating in the second half as emerging markets trade mitigated a global economic downturn.

Emerging markets have since been pulled down by crises elsewhere and Narayan said the bullish outlook had changed. While DP World still expected growth in 2009, with the Middle East and Australian markets still growing despite a slowdown in Europe and Asia, he said it expected "challenging conditions" to remain for the foreseeable future after the global economy deteriorated late in 2008.

"We expect the challenging macroeconomic environment to continue to impact volumes for the foreseeable future. We have therefore implemented a strategy to focus on minimising the impact on margins and conserving cash."  [27/01/09]

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