UAE based global ports and logistics services provider DP World reported revenues up 9.7% y-o-y to $20,023m, with adjusted operating profit (EBITDA) up 6.7% in the same period to $5,450m. CEO Sultan Ahmed bin Sulayem said, “These results demonstrate the benefits of our strategic focus on high-margin cargo, end-to-end supply chain solutions and disciplined cost optimisation.”
Logistics division profits fall sharply
The Logistics, Parks and Economic Zones division reported an EBITDA fall of 17.5% y-o-y to $1,162m on constant currency revenue that increased 3.5% in the period to $8,199m. DP World CFO Yuvraj Narayan said, “Strong freight forwarding growth and acquisitions offset the impact of geopolitical challenges and currency devaluation in Africa.”
During 2024 the company invested $652m in targeting expansion in Sub-Saharan Africa, India, the GCC and Europe. It also announced the acquisitions of Australia based Silk Logistics, a port logistics and contract logistics company, and China based freight forwarders Cargo Services Far East Ltd that specialises in the transport of goods from factory floor to the customer’s door.
Bin Sulayem said, “Our strategic investments have scaled our freight forwarding network to over 200 locations, covering nearly all major trade routes and strengthening our ability to serve a broader client base with seamless, integrated logistics solutions.”
Ports & Terminals benefit from higher volumes
The Ports & Terminals offer the company far higher margins than its logistics arm, generating an EBITDA margin of 50.9% vs the Logistics division’s 14.9% in 2024. Revenue was up 20.7% y-o-y to $7,725m and EBITDA up 16.8% to $3,935m. Thanks to the high volumes in its ports, DP World reported an uplift in revenue of 10.1% per TEU in the division over the year.
Asia Pacific & India revenues grow strongly
Revenue in the Asia Pacific & India geography went up 32.1% y-o-y to $2,846m. This was, according to Narayan, “Driven by a combination of robust container volume expansion and portfolio additions.”
It is worth noting that the company admitted in its financial statement that for this region that where inorganic growth helped earnings, like-for-like performance remained stable.
Organic growth drives Australia and Americas revenues
In this geography, revenue grew 13.4% y-o-y to $3,255m, which was according to the DP World CFO, “Primarily driven by robust container volumes in the Americas.”
We will see how things transpire in the next quarterly financial report, but ahead of the change of US Presidential administration and the threat of tariffs, there was a widely understood rush among shippers to get their goods into the US and past customs ahead of any changes. As such these robust volumes may well have tailed off at the time of writing.
Middle East, Europe and Africa relatively gentle revenue growth
Compared to the other geographies, this region’s revenues grew a relatively modest 5.3% to $13,922m. EBITDA grew 3.5% to $4.2bn, led by strong results in the UAE and Africa, though its ports at Jeddah in Saudi Arabia and Unifeeder in Europe both suffered from the Red Sea crisis.
In October 2024, DP World announced a $1bn investment in expanding the London Gateway container port over the next five years that will ultimately make it the biggest port in the UK. At the time, DP World CEO of Ports and Terminals Ernst Schulze said, “With extra capacity comes the reliability and supply chain resilience so important to our customers and consumers, especially in uncertain times such as the pandemic and disruption due to geopolitical events.”
Author – Richard Shrubb
Source: Ti Insight
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