DP World slows down Jebel Ali expansion
DP World will slow down expansion of its Jebel Ali port due to “softer market conditions” amid a bleak global trade outlook.
The port operator had last year planned to spend $1.6bn on a fourth terminal in Jebel Ali to boost capacity by 16% to 22.1m teu by 2018. Now, DP World is delaying the expansion of Terminal 3 into 2017 and will slow down construction of Terminal 4, without giving a new date of completion.
In an interview with The National, chairman Sultan bin Sulayem said: “At Terminal 4, we haven’t stopped construction. We will be ready to react if the customers feel that they will be increasing their business.”
The slower expansion at Jebel Ali comes after a 6% drop in UAE’s throughput to 7.4m teu in the first half, caused by a reduction in lower margin cargo.
DP World announced that net profit attributable to equity holders before separately disclosed items in the six months to June 30 rose 4.3% year-on-year to $608m on a like-for-like basis at constant currency, and 50.2% year-on-year on a reported basis.
“The year before, 2015, was unusually busy and it will be difficult to really beat that,” Mr bin Sulayem told The National. “The issue is not the Middle East. This issue is a world issue. The shipping lines have more capacity. There are concerns about the slow pace of China and so on.”
Looking ahead to the second half of the year, Mr bin Sulayem added that he expected throughput performance to improve, and like-for-like performance to be similar to the first half.
He concluded: “The outlook for trade growth remains uncertain. However, we believe our portfolio is well positioned to continue to outperform the market. We remain focused on delivering relevant new capacity in the right markets through disciplined investment, improving efficiencies and managing costs to drive profitability.”
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