DP World has announced robust financial results for the year ended 31 December 2019. On a reported basis, revenue grew 36.1% and adjusted EBITDA increased 17.7% with adjusted EBITDA margin of 43%, delivering profit attributable to owners of the Company, before separately disclosed items, of US$1,328 million, up 4.6%.
Revenue of US$7,686 million
- Revenue growth of 36.1% was driven by acquisitions including P&O Ferries (UK), Topaz Energy & Marine (UAE) and the two terminals in Chile (Puerto Central and Puerto Lirquen) as well as the full year impact from Continental Warehousing Corporation (India), Cosmos Agencia Maritima (Peru) and Unifeeder (Denmark), and the consolidation of Australia region.
- Like-for-like revenue increased by 2.3% driven by 16.0% growth in non-container revenue.
Adjusted EBITDA of US$3,306 million and adjusted EBITDA margin of 43%
- Adjusted EBITDA grew 17.7% and achieved an EBITDA margin for the full year of 43%.
- Like-for-like adjusted EBITDA margin was at 49.6%.
Profit for the period attributable to owners of the Company of US$1,328 million
- Strong adjusted EBITDA growth resulted in a 4.6% increase in profit attributable to owners of the Company before separately disclosed items on a reported basis and 5.4% growth on a like-for-like basis at constant currency.
Strong cash generation and robust balance sheet
- Cash from operating activities was US$2,462 million.
- Free cash flow (post cash tax maintenance capital expenditure and pre-dividends) amounted to US$2,058 million.
- Leverage (Adjusted Net Debt to adjusted EBITDA) at 3.9 times. Pre IFRS 16 leverage stands at 3.4 times.
Proposed Total dividend per share of US$0.40 which is broadly in line with historic pay-out ratio.
Bond Transaction Executed at Record Levels
- Raised US$2.3bn through issuance of long-term bonds at record low rates to remove refinancing risk.
- Further strengthens balance sheet and offers financial flexibility.
Continued Investment Across the Portfolio
- Ports & Terminals investments include two new terminals in Chile (Puerto Central and Puerto Lirquen) and consolidation of terminals in Australia.
- Logistics investment includes acquisition of Pan-European logistics platform of P&O Ferries and Marine logistics operator, Topaz Marine & Energy.
- Capital expenditure of $1,146 million invested across the existing portfolio.
- In 2019, gross global capacity was at 91.8 million TEU. Consolidated capacity was at 54.2 million TEU.
- Capital expenditure guidance for 2020 is up to $1.4 billion with investments planned in UAE, Prince Rupert (Canada), London Gateway (United Kingdom), Jeddah (Saudi Arabia), Callao (Peru), Sokhna (Egypt) and Berbera (Somaliland).
- Posorja, the only deep-water port in Ecuador with capacity of 750k TEU opened on time and on budget.
- 30-year concession renewal at Jeddah Islamic Port, largest port and hub that connects East-West cargo in the Kingdom of Saudi Arabia.
Global trade outlook uncertain
- Global trade outlook remains uncertain due to supply chain disruption caused by Covid-19 outbreak.
- DP World continues to focus on maintaining its disciplined approach to investment to deliver integrated supply chain solutions to cargo owners.
- Looking ahead into 2020, the company will focus on integrating its recent acquisitions and managing costs to protect profitability.
DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented: "We have continued to make progress on our strategy to deliver integrated supply chain solutions to cargo owners and have focused our efforts on building end-to-end capabilities for several verticals including the Automotive, Oil & Gas and FMCG industries.
More recently, DP World has taken the decision to announce its plans to de-list its equity from the stock exchange and return to private ownership.
However, the immediate focus is to integrate new acquisitions with the objective of providing a range of smart end-to-end solutions which will improve the quality of our earnings and drive returns.
The Sultan added, "The near-term outlook remains a cause for concern with global trade disputes, Covid-19 outbreak and regional geo-politics, causing disruption to trade. Overall, we remain positive on the medium to long term outlook of the industry."