DP World's cash position continues to remain strong

Global marine terminal operator DP World has enough cash available to continue its business growth and the Dubai World restructuring will not have any impact on its terminal expansion plans, according to its top official.

"Our balance sheet continues to be strong and the Dubai World restructuring won't have any impact on our expansion plans, which will be driven by market demand," Mohammed Sharaf, Chief Executive of DP World, said during a media telephone conference yesterday.

He said liquidity is a global concern and the whole world has been affected by this problem. "But we're thinking ahead of it, and as and when the time comes, we'll be announcing our plans. But as of now, we've enough cash available for our business expansion," he said.

DP World also announced its 2009 throughput volume figures, which showed the operator handling 25.6 million TEUs (twenty-foot equivalent container units) across its portfolio of 28 consolidated terminals last year, a decline of eight per cent compared to 2008.

Consolidated terminals are those where DP World has majority ownership or operational/management control. Across all 50 of its operational terminals in 2009, DP World handled 43.4 million TEU, a decline of six per cent over 2008.

Sharaf said DP World's volume last year outperformed the global decline in container throughput volume, as it focused on more resilient emerging markets that have not been as impacted by the slowdown in trade globally.

"As per the World Bank estimates, 50 per cent of the global growth is going to come from emerging markets this year. We're focused on emerging markets and we're hoping that our growth will be driven by these markets," he said.

"DP World terminals have continued to reflect the resilience with the decline of only six per cent across 50 terminals in 2009 compared with 2008. This compares favourably with the industry performance, which is expected to report a decline of almost 12 per cent, as per estimates by Drewry Shipping Consultants. We handled more volumes in the second half of 2009 than the first half. Our focus on the emerging markets, particularly Africa, the Middle East and the Indian subcontinent, led to better than the industry performance."

Sharaf said in the UAE, the company reported throughput of 11.1 million TEU, a decline of six per cent compared to a year earlier.

Asked about DP World's terminal expansion plans in India, he said: "The brand new Vallarpadam terminal in India is expected to open in the second quarter of this year. Expansion plans for other terminals in India continue to be reviewed and, as with all our expansions, will depend on market demand."

Other terminals becoming operational this year will be Callao in Peru, and by the end of 2010 or early next year, Port Qasim container terminal in Karachi is expected to become operational.

Last year, DP World improved its efficiency and reduced its operational and technical costs, and it will continue doing that in 2010, said Sharaf. He said: "We remain confident about the long-term outlook for the industry and our strong competitive position within it. While we have seen a better performance in the second half of 2009, predicting global trade trends in 2010 remains challenging. While we expect to see volumes improve, we will continue to remain focused on growing revenues and managing costs to drive Ebitda forwards."

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