Port firm DP World sees 2019 profits drop 8.3% as it delists
DUBAI, United Arab Emirates (AP) — Dubai-based port operator DP World said Wednesday its profits fell 8.3% to $1.18 billion in 2019, warning that global trade remains threatened by trade wars and the spread of the new coronavirus.
The annual report may be last for the port operator that’s predominantly government-owned in this sheikhdom, and which is also home to the long-haul carrier Emirates and Dubai International Airport, the world’s busiest for international travel.
DP World announced in February plans to delist from the Nasdaq Dubai over concerns about looming global economic worries, putting the firm fully back in government control.
In its results, DP World said its revenue in 2019 jumped to $7.68 billion, a 36.1% increase it attributed to a year of acquisitions by the operator. The company now operates across 51 countries around the world ranging from Brisbane, Australia, in the East to Prince Rupert, Canada, in the West.
DP World reported revenues of $5.6 billion and profits of $1.29 billion in 2018.
Sultan Ahmed bin Sulayem, DP World’s chairman and CEO, acknowledged tough times may be ahead in a statement. He added that the firm’s “long-term approach to business is not aligned with the short term thinking of equity markets,” which is behind its push to delist.
Dubai already was suffering from a slowdown in its real estate market before the global economic slowdown sparked by the new coronavirus and the COVID-19 illness it causes. The wider United Arab Emirates, also home to Dubai, also now faces how to adapt to the crash in global energy prices after OPEC and Russia failed to reach a deal to reduce oil production.
“The near-term outlook remains a cause for concern with global trade disputes, (the) COVID-19 outbreak and regional geopolitics causing disruption to trade,” the DP World chairman said. “However, DP World is well positioned to respond in the short term.”
Port and Free Zone World, which already owns 80.45% of DP World, will acquire the remaining 19.55% of shares listed on the Nasdaq Dubai, in a deal estimated at $2.7 billion. DP World’s parent company will pay Dubai World $5.15 billion to assist it in repaying its outstanding obligations to banks as well.
DP World separately continues to expand into Eastern Africa as well, where the UAE has begun building military bases.
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