DP World, one of the world’s largest container terminal operators, gave evidence on Thursday of the continuing robust conditions for owners of emerging market infrastructure when it announced net profits for 2011 up 67 per cent to $751m.
The company, whose net profits compared with 2010’s $451m, also expressed optimism about prospects for the current year, saying volumes for the first two months of 2012 were up 11 per cent year-on-year.
However, DP World’s figures came on the same day that Zim Integrated Shipping, Israel’s biggest container shipping line, announced it suffered a $397m net loss for the year, on revenue up 2 per cent to $3.8bn.
Container terminal operators have benefited from the return to growth in world container trade in the past two years because capacity at some of the most important ports is tight, and growth in Africa, Latin America and many other emerging markets remains strong.
Shipping lines, meanwhile, continue to suffer miserable rates per container shipped as deliveries of new ships ordered before the end of the sector’s 2003-08 boom leave many ships without work.
DP World announced in January that its 2011 traffic was 10 per cent up on the previous year, with traffic at its terminals in Africa – in Mozambique, Djibouti, Algeria and Senegal – up 30.5 per cent. In Latin America, where the operator has facilities in the Dominican Republic, Peru, Argentina and Suriname, growth was running at 22 per cent.
Emerging markets made up for the far more lacklustre growth at the company’s facilities in Europe and other developed economies. The figures were flattered by a $484m net profit on sales of businesses, mainly the sale of 75 per cent of DP World’s Australian terminals business, and included $244m in writedowns of underperforming assets. Excluding the non-recurring items, the profits would have risen 18 per cent to $532m.
Mohammed Sharaf, chief executive, held up the partial withdrawal from Australia, which freed up cash for investments in faster-growing countries, as an example of the kind of deal the company wanted to do. “Going forward, the focus will continue to be on emerging markets,” he said.
The dividend, adjusted for a share consolidation last year, was raised 41 per cent to 24 cents, while earnings per share rose 82 per cent to 82 cents. The shares, quoted in London and on Nasdaq Dubai, rose 25p, or 3.5 per cent, to 742½p.
Zim, controlled by Israel Corporation, a listed company controlled by the Ofer family, experienced a 9 per cent rise in container traffic. Its 2011 figures had reflected overall industry conditions, the company said. But a surge in freight rates in the first months of this year, as well as a financial restructuring, made prospects for this year better.
Rafi Danieli, Zim’s chief executive, said the company was now on a “stable financial basis” and well set for 2012.