DP World announces 1H 2023 results
DP World Limited has announced resilient financial results for the first six months to 30 June 2023. On a reported basis, revenue grew by 13.9% to $9,037 million and adjusted EBITDA grew by 7.0% to $2,611 million with adjusted EBITDA margin of 28.9%, according to the company's release.
Capital expenditure guidance for 2023 is for approximately $2.0 billion to be invested in UAE, Jeddah (Saudi Arabia), London Gateway (United Kingdom), Dakar (Senegal), Callao (Peru) and DPW Logistics (South Africa).
DP World containers volumes increased by 3.1% compared to a market decline of 2.0%. A strong performance from Asia Pacific was the key driver of growth, while Americas and Europe were softer due to the weaker economic environment.
The company developed new products like Cargoes Flow, DP World Trade Finance, and Cargoes Logistics, making trade easier for cargo owners, especially SMEs.
The company achieved a significant 47% reduction in DP World's UAE carbon emissions through renewable energy programme.
The company committed to investing over $500 million in cutting CO2 emissions by 700k in the next 5 years, which accounts to approximately 22% of its total emissions.
DP World has delivered a robust set of first half 2023 results with steady adjusted EBITDA growth of 7.0% to $2,611 million. The adjusted EBITDA margin remained broadly stable as our cost optimization projects help protect profitability.
Reported revenue grew by 13.9% to $9,037 million as the Group benefitted from the full year contribution of acquisitions while like-for-like revenue grew by 7.1% driven by growth in Logistics as revenue synergy plans begin to attract new customers. Operating profit grew by 8.2% to $1,603 million which was also up 6.1% on a like-for-like basis.
The strengthening of DP World's balance sheet in 2022 has resulted in the company's credit rating being upgraded by Fitch by two notches to BBB+ with a Stable outlook while Moody’s upgraded by one notch to Baa2 with Stable Outlook.
As anticipated, the Asia Pacific and India financials was impacted by a weaker performance in Marine Service (Unifeeder ISC) which saw its profitability decline due to lower freight rates. The unwinding of supply chain bottlenecks has resulted in the normalisation of ocean freight rates to pre-covid levels. In contrast, Ports and Terminals delivered a robust performance with the focus on high margin cargo continuing to drive growth in profitability. Overall, revenue declined by 16.9% on a reported basis which resulted in adjusted EBITDA of $315 million. The company invested $85million in Asia Pacific & India, mainly focused in Cochin & Logistics business in India.
Performance of Ports and Terminal was steady as a solid performance in Middle East and Africa compensated softer volumes in Europe. Marine Services performance was bolstered by a strong performance at Drydocks World (DDW) and P&O Maritime and Logistics (POML) due to new contract wins and higher charter rates. Improvements at P&O Ferries also contributed to the uplift.
Total reported revenue increased by 25.7% to $6,528 million mainly attributable to the full six months consolidation of Imperial Logistics (2022 – 4 months) while like-for-like revenue grew 14.2%. Adjusted EBITDA reached $2,060 million, up 20.1% on a like-for-like basis. EBITDA margins remained healthy at above 30%. The company invested $681 million region, mainly in UAE, Imperial Logistics (Africa), Jeddah (Saudi Arabia), Sokhna (Egypt), London Gateway (UK) and Constanta (Romania).
Total reported revenue was broadly flat at $1,416 million, while adjusted EBITDA declined by 7.8% to $441 million. EBITDA margins remained at above 30%.
The company invested $117 million in capital expenditure in Australia & Americas, mainly in Callao (Peru), syncreon (USA), Caucedo (Dominican Republic).
Adjusted gross debt (excluding bank overdrafts and loans from non-controlling shareholders) stands at $19.2 billion compared to $18.5 billion as of 31 December 2022. Lease and concession fee liabilities account for $4.5 billion, with interest-bearing debt of $14.7 billion as of 30 June 2023. Cash and cash-equivalents on the balance sheet stood at $3.4 billion, resulting in net debt of $15.8 billion or $11.3 billion (on a pre IFRS 16 basis). The company's net leverage (adjusted net debt to adjusted EBITDA) stands at 3.2 times on post-IFRS16 basis and would be 2.8x on pre-IFRS16 basis. Cash generation remained solid, with cash from operations steady at $2.5 billion (1H 2022: $2.2 billion).
Consolidated capital expenditure in the first half of 2023 was $910 million, with maintenance and replacement capital expenditure of $298 million. The company expects the full-year 2023 capital expenditure to be approximately $2.0 billion, which will be invested in UAE, Jeddah (Saudi Arabia), London Gateway (United Kingdom), Dakar (Senegal), Callao (Peru), Marine Services (P&O Ferries) and Imperial Logistics (South Africa).
The net finance cost for the six months increased to $505 million compared to prior period at $373 million. Increase is mainly due to higher average debt and increase in effective interest rates during the period.
Profit attributable to non-controlling interests (minority interests) before separately disclosed items was $235 million against 1H 2022 of $163 million mainly due to increase in minority interests in Jebel Ali (UAE).
DP World handled 20.3 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in the second quarter of 2023, with gross container volumes increasing by 0.5% year-on-year on a reported basis and 2.6% on a like-for-like basis.
In the first half of 2023, DP World handled 39.9 million TEU on a gross basis with container volumes increasing by 0.9% year-on-year on a reported basis and up 3.1% on a like-for-like basis. Jebel Ali (UAE) handled 3.6 million TEU in 2Q2023, on par year-on-year.
At a consolidated level, the company's terminals handled 11.6 million TEU in 2Q2023 up 0.1% on a reported basis and down 1.7% like-for-like basis. In the first half of 2023, DP World handled 23.0 million TEU, with container volumes increasing by 0.4% year-on-year on a reported basis and decreased 1.5% on a like-for-like basis.
