DP World reports 1.9% increase in third-quarter shipping container volumes

Dubai-based global port operator DP World said it is set to deliver a "relatively stable" financial performance in 2020 after reporting a 1.9 per cent increase in third-quarter gross container volumes led by Europe, Middle East and Africa.

The company handled 18.3 million twenty-foot equivalent units (TEUs) across its global portfolio of container terminals in the three months ending September, up from 17.7m TEUs in the same quarter a year ago, DP World said in a statement on Monday.

The company's third-quarter gross container volumes grew 3.1 per cent on a reported basis, which follows a contraction in the first and second quarters of the year and compares to a 2.2 per cent decline for the industry, according to Drewry estimates.

The decline in economic activity as a result of the Covid-19 pandemic has amplified domestic disruptions around the world and led to a contraction in global trade. Global trade is now set to shrink 10.4 per cent this year, compared with last year's growth of 1 per cent, due to weak demand, the collapse of the tourism industry and supply disruptions related to shutdowns, according to the International Monetary Fund. It is projected to expand by 8.3 per cent next year.

DP World, which operates ports and cargo terminals across the world including London and Antwerp, hubs in Africa, Russia, India and the Americas,  handled 52.2m TEUs in the first nine months of the year. That is a 2.5 per cent decline on a reported basis and 2 per cent lower on a like-for-like basis, compared with the same period in 2019.

"The nine-month solid volume performance leaves us well placed to deliver a relatively stable financial performance in 2020 and we remain confident of meeting our 2022 targets," Sultan bin Sulayem, DP World's chairman and group chief executive, said.

DP World's flagship Jebel Ali port handled 3.4m TEUs in the third quarter, down 4.2 per cent year-on-year. In the first nine months of the year, it handled 10.1m TEUs, a drop of 5.9 per cent on the same period in 2019.

Its three other regions showed positive growth during the third quarter. Europe, Middle East and Africa's container volumes grew 2.7 per cent on a like-for-like basis, the Americas and Australia rose 2.4 per cent while Asia Pacific and India inched up 0.9 per cent.

While the recent volume trends are encouraging, the outlook remains uncertain because of the possibility of new lockdowns following a second wave of Covid-19 infections, geopolitical uncertainty with the upcoming US elections and lack of progress in ongoing trade wars, Mr bin Sulayem said.

"Looking ahead, we remain focused on containing costs to protect profitability and managing growth capex to preserve cashflow," he said.