DP World H1 net profit drops 59% on Red Sea troubles

DUBAI : Dubai-based global port operator DP World (DPW) has reported a 59% drop in H1 2024 net profit, attributable after separately disclosed items, to $265 million on disruptions to shipping caused by the Red Sea crisis.

Revenue edged 3.3% higher year-on-year (YoY) to $9.34 billion driven by the ports and terminals segment and like-for-like growth of 6% in gross container volumes, the company said in a statement on Nasdaq Dubai where its sukuk is listed. 

DPW, the fifth-largest container port operator globally, gave a capex guidance of approximately $2 billion for 2024, unchanged from the previous quarter.

Chairman and CEO Sultan Ahmed Bin Sulayem said the year has been marked by a deteriorating geopolitical environment and disruptions to global supply chains due to the Red Sea crisis. “Nevertheless, our strategic emphasis on high-margin cargo, comprehensive end-to-end supply chain solutions, and stringent cost management have been crucial in achieving this financial performance.”

The group’s net debt to adjusted EBITDA on a pre-IFRS16 basis stands at 3.8x as of June-end versus 3.7x as of FY 2023, in line with its policy to manage the balance sheet at below 4.0x.

In June, Fitch Ratings affirmed DPW’s Long-Term Issuer Default Rating (IDR) at ‘BBB+’, with stable outlook. The Short-Term IDR has been affirmed at ‘F2’. The affirmation reflects the group’s stable cash flow generation, supported by its diversified business profile and stable origin and destination (O&D) ports-related revenue as well as the long-term maturity (81 years remaining) of its flagship assets, Jebel Ali Port and Jebel Ali Freezone, the agency said.