DP World reports gross volume growth 1.4% y-o-y in Q1 of 2023

DP World Limited handled 19.5 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in the first quarter of 2023, with gross container volumes increasing by 1.4 per cent year-on-year (y-o-y) on a reported basis and up 3.7 per cent on a like-for-like basis.

The growth was driven by a strong performance in Asia Pacific and India, which was partially offset by softer performance in Europe and the Americas. Jebel Ali handled 3.5 million TEU in Q1 of 2023, up 2.3 per cent year-on-year.

At a consolidated level, DP World terminals handled 11.4 million TEU during the first quarter of 2023, up 0.7 per cent year-on-year on a reported basis but down 1.3 per cent on a like-for-like basis.

Group Chairman and Chief Executive Officer Sultan Ahmed Bin Sulayem said, “Our portfolio has had an encouraging start to the year with container volume growth of 3.7 per cent, once again ahead of the market, estimated to be down by 6.3 per cent. This outperformance continues to demonstrate that we are in the right locations. Our strategy will offer integrated supply chain solutions to beneficial cargo owners driving value for our stakeholders.

“A strong performance in Asia Pacific and India drove our growth. However, as anticipated, volume growth has softened in some regions, such as Europe and the Americas, due to uncertain economic conditions. Volumes at our flagship Jebel Ali terminals remain robust, with growth of 2.3 per cent.”

“Given the geopolitical backdrop, high inflation and currency fluctuations, the near-term outlook remains somewhat uncertain,” he added.

Bin Sulayem continued, “However, we expect our portfolio to deliver a stable performance in 2023 as we remain focused on driving revenue synergies from our recent acquisitions while managing costs and growth capex.”

Meanwhile DP World has invested more than $10 billion (Dhs37.3 billion) in the global logistics sector since 2012, making it one of the top five overseas investors in this period, according to the latest foreign direct investment (FDI) data released by leading industry consultants.

The FT’s FDI Intelligence recently published its top five list for 2022, which ranks DP World fifth in the world by total value of direct investments allocated to the overseas logistics services sector.

DP World’s investments over the past year totalled $320 million (Dhs1.18 billion) despite demand for logistics services stalling as the global economy slowed. 2023 forecasts expect single-digit demand growth in the industry.

Other firms in the top five include US giant Amazon and AP Moller Maersk from Denmark. DP World is the only firm in the top five based outside of the US or Europe.

Commenting on the ranking, Sultan Ahmed bin Sulayem, Group Chairman and CEO of DP World, said: “The data shared by FDI Intelligence demonstrates where we stand globally within the logistics sector, not only in the last year but consistently over the last 10 years.”

“DP World’s companies touch people’s lives around the world every day. Sometimes it is tangible, and sometimes we are in the background making sure people and businesses get the goods they require. Our infrastructure opens untapped trade opportunities, grows economies and makes goods more affordable. Investing in developing economies helps trade go further, facilitates economic growth, attracts foreign investment and generates thousands of jobs – raising the quality of life for everyone.”

The latest “Trade in Transition” study in January, commissioned by DP World and led by Economist Impact, revealed the emergence of major shifts in globalisation, as companies rushed to move manufacturing closer to home to protect against supply chain disruptions while increasingly protectionist policies are breaking the world into trade blocs. Its key finding is that 96 per cent of companies are making changes to their supply chains due to geopolitical events.

One of the company’s key priorities in 2022 was to broaden its partnerships to unlock this trade potential. DP World enhanced its relationship with India’s National Infrastructure Investment Fund (NIIF) to raise approximately $300 million (Dhs1.1 billion) and created a new investment platform with the British International Investment Group to accelerate investment in Africa.

The continent has been a key focus area, with the development of the Port of Ndayane, Senegal, representing the beginning of a $1 billion investment. This is DP World’s largest port investment in Africa and the largest single private investment in the history of Senegal.

The nearby Dakar port is credited with a 10 per cent uplift in Senegal’s GDP growth, so the new port will reinforce Senegal’s position as a trade hub in West Africa and further its development through the next century.

Plans are also progressing to expand the capabilities of operations in Caucedo, Dominican Republic while the Callao Port expansion in Peru will create one of the single biggest terminals in South America once it is completed later this year.

The UK has been another key destination for investment.

Over the last decade, DP World has invested 2 billion pound (Dhs8.99 billion) in the UK, supporting thousands of jobs.

For the next 10 years, the logistics provider has earmarked a further £1 billion of investment, with a 350 million pound new fourth berth at London Gateway now well under construction.

In Romania, DP World is also building new infrastructure at the Port of Constanta – including a new roll-on/roll-off (RO-RO) terminal -- to turn it into one of the most critical cargo and vehicle hubs on the Black Sea, a key gateway for trade into Eastern Europe.