DP World profit jumps; eyes Iran port ops

Tuesday, 1 September 2015 00:07 - - {{hitsCtrl.values.hits}}

Reuters: DP World may launch operations in Iran, the company’s chairman said on Thursday, as the global ports operator reported a jump in half-year earnings after buying assets from its parent company.

Customer demand will dictate what it will spend on developing port facilities on the Caspian Sea, which it is currently exploring with Iranian authorities.

“Iran has a good land bridge of rail that will connect the Silk Route from China to Europe,” chairman Sultan Ahmed bin Sulayem said on an earnings call with reporters.

“With our ports in the Gulf, we need to go into Iran,” he said, without giving a timeframe for the investment.

He said DP World officials visited Iran ahead of Tehran’s nuclear deal with world powers in July that could see trade sanctions lifted.

DP reported a 21.9% jump in first-half net profit to $405 million.

The acquisition of logistics infrastructure firm Economic Zones World (EZW) boosted revenue, which rose 14.2% helped also by new capacity in Netherlands and India.

DP World said in November it would pay $2.6 billion for EZW, at that point owned by Dubai World, which owns 80.45% of DP World.

DP spent $3.5 billion on acquisitions and expansionary capex in the first half. That included the purchase of Canada’s Fairview Container Terminal, which was completed in August.

“This investment leaves us well placed to capitalise on the significant medium- to long-term growth potential of this industry,” Sulayem said.

He said the firm was still on track to meet its year-end targets, although it was too early to estimate the full impact on container demand from the economic turbulence in China.

Chief executive Mohammed Sharaf was quoted as saying in the earnings statement that he expected growth rates to moderate in the second half.

The Dubai-based firm is set to increase its capacity by the end of the year to about 85 million TEU (twenty-foot equivalent units), as new terminals at UAE’s Jebel Ali and Turkey’s Yarimca add 2.8 million TEU.