DP World Expresses Concern on Future
Dubai state controlled port operator DP World's revenue grew 36.1% in 2019, but it says the near-term outlook remains “a cause for concern” due to global trade disputes and the coronavirus outbreak.
DP World, one of the world’s largest port operators, made $1.34 billion last year compared to $1.33 billion in 2018, it said in a bourse filing. Revenue rose 36.1% to 7.7 billion.
"However, the global trade outlook remains uncertain due to supply chain disruption caused by Covid-19 outbreak," it said in a press note.
"However, DP World is well positioned to respond in the short term by focusing on disciplined investment and managing the cost base to protect profitability. Overall, we remain positive on the medium to long term outlook of the industry," said DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem.
More recently, after much deliberation, DP World has taken the decision to announce its plans to de-list its equity from the stock exchange and return to private ownership.
"The strength and resilience that our business continually demonstrates throughout the cycles is due to the investment the Group has made over the years in response to changes in our industry. Our ability to adapt and change has been the key to our success, and we must continue to evolve for continued success. We believe this long-term approach to business is not aligned with the short term thinking of equity markets and consequently the next stage of DP World's development will take place as a private company," he added.
"Following the planned delisting, the leverage on the balance sheet will rise temporarily but we are confident of de-leveraging as we remain committed to a strong investment grade rating in the medium term. The business continued to generate high levels of cash flow and combined with more disciplined investment and potential capital recycling, we have enough flexibility to maintain a strong balance sheet. Our immediate focus is to integrate our acquisitions and explore synergies with the objective of providing a range of smart end-to-end solutions which will improve the quality of our earnings and drive returns," Bin Sulayem said.
