Results Highlights

Revenue of $4,945 million (Revenue growth of 21.3% on a reported basis)
Revenue growth of 21.3% supported by acquisitions and strong growth in India, Australia, and the UK.
Like-for-like revenue increased by 9.0%.
Adjusted EBITDA of $1,813 million and adjusted EBITDA margin of 36.7%
Adjusted EBITDA increased 18.2%, and EBITDA margin for the half-year stood at 36.7%. Like-for-like adjusted EBITDA margin of 38.5%.

Profit for the period attributable to owners of the Company increased to $475 million
Profit attributable to owners of the Company before separately disclosed items increased 51.9% on a reported basis and 39.4% on a like-for-like basis

Robust Cash Generation

Cash from operating activities remains strong at $1,490 million in 1H2021 compared to $1,124 million in 1H2020.
Leverage (Net debt to annualised adjusted EBITDA) decreased to 3.5 times (Pre-IFRS16) from 3.7 times at FY2020. On a post-IFRS16 basis, net leverage stands at 4.0 times compared to 4.3 times at FY2020.
DP World credit rating remains investment grade at BBB- with Stable Outlook by Fitch and Baa3 with Stable Outlook by Moody’s.

Selective Investment in Key Growth Markets
Capital expenditure of $687 million was invested across the existing portfolio during the first half of the year.
Capital expenditure guidance for 2021 is for approximately $1.2 billion with investments planned into UAE, Canada, Jeddah (Saudi Arabia), Berbera (Somaliland), Sokhna (Egypt), Luanda (Angola), P&O Ferries, London Gateway (UK) and Callao (Peru).

Acquisitions to bring value-add capabilities, exposure to high growth markets and long-term relationships with cargo owners
Announced acquisitions of syncreon and Imperial Logistics.
Acquisitions bring value-add capabilities in fast-growing markets and verticals.
Adds long-term relationship with cargo owners.

Strong 1H2021 Performance, Near Term Outlook Positive
Portfolio has delivered a strong performance in 1H2021 on higher consumer spend and rebound in global trade.
Near term outlook remains positive, but we expect growth rates to moderate.
DPW 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 said: “We are delighted with the strong set of first-half results with adjusted EBITDA growing 18.2% and attributable earnings rising 51.9%. This significant growth 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.

In recent years we have seen cargo owners respond positively to our integrated end-to-end product offering, and we aim to continue with our drive to enable trade. Our recently announced acquisitions of Imperial Logistics and syncreon bring value-add capabilities in high growth verticals and markets, which will allow us to offer a more compelling set of supply chain solutions. By leveraging our best-in-class infrastructure across inland logistics, ports & terminals, economic zones, and marine logistics network, DP World aims to lower inefficiencies and provide improved connectivity in fast-growing trade lanes such as Asia, Middle East & Africa.

“Importantly, we continue to make positive progress with our capital recycling program, and this, combined with the strong operational performance, leaves us well-positioned to deliver on our 2022 combined (DP World and PFZW) leverage target of less than 4x Net Debt to adjusted EBITDA (Pre IFRS16).

“Overall, the near-term outlook remains positive, and while we are mindful that the Covid-19 pandemic and geopolitical uncertainty could once again disrupt the global economic recovery, we remain positive on the medium to long-term fundamentals of the industry and DP Worlds ability to continue to deliver sustainable returns”.

The 400 m long ship is now heading in the opposite direction and it is about to enter the Great Bitter Lake after a voyage of close to 15 days, originating from the port of Felixstowe.

The Evergreen-operated vessel is set to travel through the Suez Canal without cargo and is scheduled for repairs.

The 20,388 teu Ever Given came to worldwide attention in March when it grounded and blocked the Suez Canal for six days. The Shoei Kisen-owned ship left Egypt in July carrying more than 18,000 containers after a compensation claim was negotiated.

The temporary lockdown of the port of Yantian in the second quarter is still negatively affecting container prices and availability in southern China.

COVID-19 outbreaks at ports in China and Vietnam will likely reduce container availability and drive-up prices at key shipping hubs in the coming weeks, according to the latest data analysis by Container xChange, the world’s leading online platform for the leasing and trading of shipping containers.

Terminal productivity declines at Yantian and nearby terminals in southern China due to COVID lockdowns in the second quarter of 2021 are still causing disruptive ripples up and down container supply chains, including reduced box availability and soaring prices.

Container xChange analysis indicates that similar trends are likely due to more recent COVID lockdowns in Vietnam and Ningbo in China.

“We saw a real and measurable spike in container prices and a major drop in container availability as measured by our Container Availability Index (CAx) when terminals at Yantian saw operations disrupted through most of June,” said Christian Roeloffs, co-founder of Container xChange. “Early indicators suggest we are likely to see the same impact in Vietnam and at Ningbo.”

According to the CAx, average container prices (defined as the average price of the transactions on the Container xChange platform covering all container sizes including 20 ft. and 40 ft. dry containers) at the port of Yantian increased from $5,515 in June to $15,336 this month.

This compared to much smaller container price increases at the ports of Shanghai and Qingdao over the same period. Average container prices in Shanghai increased from $4,468 to $5,570, for example, while at Qingdao, they increased from $4,793 to $5,203.

A similar negative trend for those seeking boxes was apparent at Yantian as availability declined significantly. In Container xChange’s Container Availability Index (CAx), an index reading of below 0.5 means more containers leave a port compared to the number which enter. Above 0.5 means more containers are entering the port.

At Yantian, the CAx reading for a 40 ft dry container was 0.61 in Week 17 but fell to 0.47 in Week 22 and 0.3 in week 32. CAx readings for 20 ft. dry containers revealed a similar trend, dropping from 0.61 in week 17 to 0.47 in week 22 and just 0.4 in week 33.

There is good reason to expect some of the patterns evident at Yantian will emerge at other Asian shipping hubs in the weeks ahead.

COVID outbreaks that have been disrupting supply chains and port productivity in Vietnam since last month has prompted average container prices at Ho Chi Minh City to jump from $2,872 in May to $4,875 in August.

August has seen the short-notice closure of terminals at Meishan Island, part of the Ningbo-Zhoushan port complex. The port handled almost 1.2 billion tons of cargo and almost 29 million twenty-foot equivalent units (TEUs) last year, making it the third-largest container hub in the world by volume after Shanghai and Singapore, so any disruptions to services calling there will have significant knock-on impacts.

Early indicators suggest that the temporary closure of Meishan Island terminals is already causing a small spike in container prices, with average August prices climbing to $5,731, up from $5420 in June, making boxes at the port more expensive than at both Qingdao and Shanghai (but of course not at Yantian).

“Whether we see a further spike in container prices at Ningbo will probably be determined by how much cargo was disrupted at the port and whether we see additional shutdowns later this month,” said Dr Johannes Schlingmeier, CEO & Founder of Container xChange.

“Even if there are no additional closures, it is likely that container prices will rise on lower availability in the coming weeks due to the lag between liner schedule disruption and container availability and pricing.”
Register for the Digital Container summit for more insights and analysis on the global shipping and container logistics industry on 15 and 16 September 2021.