DP World Expects Decline In 2009 Profit

Port operator DP World, said on Monday a decline in container volumes was likely to hit its full year pretax profit but would be in line with market expectations.

Container volumes for the full-year 2009 period fell 8 percent to 25.6 million twenty foot equivalent units (TEUs) across its 28 consolidated terminals. The Americas and Australia saw the biggest fall, sliding 15 percent.

"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," Chief Executive Mohammad Sharaf said in a statement.

Dubai World, which shock global markets in November after requesting a standstill on $26 billion (16.1 billion pounds) in debt, is the majority shareholder in DP World.

"Customer confidence, whilst improving, remains fragile with limited visibility for the medium term."

MAC Capital Advisors sees DP World posting a 2009 net profit of $323.3 million, a fall of 39 percent.

Excluding the contribution from new terminals which joined the portfolio during 2009, volumes declined by 10 percent, while across all 50 of its operational terminals in 2009 the port operator handled 43.4 million TEUs, a 6 percent fall over 2008.

International shipping has been hit hard by the financial downturn, largely due to overcapacity caused by a construction boom that took place before the slump began.

The company, whose shares currently trade on the Nasdaq Dubai market, said earlier in January it could list on the London Stock Exchange as soon as the second quarter of 2010.

"Predicting global trade trends in 2010 remains challenging ... whilst we expect to see container volumes improve we will continue to remain focussed on growing revenues and managing costs to drive earnings before interest, tax, depreciation and amortisation (EBITDA) forwards," Sharaf said.

DP World said in January 2009 it was reviewing all expansion projects, cutting costs and freezing recruitment in view of the anticipated slowdown in 2009.

It cut around 1,300 jobs as part of previously announced 12,000 job cuts at Dubai World.

The port operator, one of the world's largest, is not part of Dubai World's parent's restructuring plans, and said on January 4 it planned to go ahead with the foundation stage of its postponed London Gateway project despite the market downturn.

Reuters