DP World Limited today announced resilient financial results for the six months to 30 June 2020 with like-for-like adjusted EBITDA growing 1% year-on-year.
• Revenue of $4,076 million (Revenue growth of 17.7% on reported basis).
• Revenue growth of 17.7% supported by acquisitions.
• Like-for-like revenue decreased by 11.6% and down 3.4% excluding Emaar land sale in 2019.
• Adjusted EBITDA of $1,534 million and adjusted EBITDA margin of 37.6%.
• Adjusted EBITDA declined 4.8%, and EBITDA margin for the half-year stood at 37.6%. Like-for-like adjusted EBITDA margin of 43.9%.
• Adjusted EBITDA excluding Emaar land sale in 2019 increased 1.1% year-on-year on a like-for-like basis displaying resilience of the wider portfolio.
• EBITDA margin declined due to a change in mix with the consolidation of lower margin Logistics businesses.
• Profit for the period attributable to owners of the Company decreased to $313 million.
• Profit attributable to owners of the Company before separately disclosed items decreased 58.5% on reported basis and 34.5% excluding Emaar land sale in 2019.
• Robust Cash Generation.
• Cash from operating activities remains strong at $1,124 million in 1H2020 compared to $1,046 million in 1H2019.
• Leverage (Net debt to annualised adjusted EBITDA) increased to 3.7 times (Pre-IFRS16) from 3.4 times at FY2019. On a post-IFRS16 basis, net leverage stands at 4.3 times compared to 3.9 times at FY2019.
• DP World credit rating remains investment grade at BBB- with Stable Outlook by Fitch and Baa3 with Stable Outlook by Moody’s.
• DP World De-lists from Equity Market.
• Port and Free Zone World (PFZW), parent of DP World, acquired shares not already owned (19.55%) for $2.7 billion.
• 96% of shareholders vote in favour of the transaction.
• PFZW borrowed $7.9 billion as at 30 June 2020, which reduced to $6.4 billion post half year, guaranteed by DP World.
• DP World to continue to focus on strategy to deliver infrastructure led supply chain solutions to cargo owners.
• Perpetual Hybrid Bonds Issued to provide Balance Sheet Flexibility
• Raised $1.5bn through the issuance of Perpetual hybrid bond.
• Hybrid proceeds used to pre-pay PFZW debt post half year.
• DP World is committed to a strong investment grade rating in the medium term.
• Disciplined Investment Across the Portfolio.
• Ports & Terminals closed transaction of Fraser Surrey Docks (Canada).
• Logistics & Maritime investment include acquisition of UNICO8, the multimodal transport specialist.
• Capital expenditure of $552 million invested across the existing portfolio during the first half of the year.
• Capital expenditure guidance for 2020 is for approximately $1.0 billion with investments planned into UAE, London Gateway (UK), Berbera (Somaliland), Sokhna (Egypt) and Caucedo (Dominican Republic).
• 1H2020 Performance Ahead of Expectations but Outlook is Uncertain.
• Portfolio has delivered better than expected performance in 1H2020 given Covid-19 pandemic.
• Outlook remains uncertain but trade is expected to recover when economies re-open.
• Looking ahead, we remain focused on delivering integrated supply chain solutions to cargo owners to drive growth and returns.
DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented:
“The Covid-19 outbreak has undoubtedly resulted in one of the most challenging periods in the history of our industry. Our gross volumes have declined by 3.9% in 1H2020 which compares favourably against an estimated industry decline of 10%. However, our like-for-like EBITDA6, excluding land sale in the prior period, has grown by 1.1% during this period which demonstrates that we have managed costs efficiently. This outperformance once again demonstrates that we are in the right locations and a focus on origin and destination cargo will continue to deliver the right balance between growth and resilience.
“Despite the challenges, we have continued to make progress on our strategy to deliver an integrated supply chain solution to cargo owners. We have focused our efforts on digitizing logistics and developed solutions for several verticals including the Automotive, Oil & Gas and FMCG industries. We are pleased to state that cargo owners have responded positively, and we are now delivering efficient solutions to our customers, which bodes well for the future.
“In 2020, DP World de-listed its equity from the stock exchange and returned 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 growth. 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.
“Looking ahead, our focus is on the safety of our employees, integration of our recent acquisitions to drive synergies, containing costs to protect profitability and managing growth capex to preserve cashflow.
“Overall, we are encouraged that our business has performed better than expected given the Covid-19 pandemic and, while the outlook is still uncertain, we remain positive on the medium to long-term fundamentals of the industry.”
Source: DP World