Operator says it is delaying expansion of Terminal 3 and slowing construction work at fourth terminal
Dubai-based ports operator DP World says it plans to slow the expansion of its Jebel Ali port due to “softer market conditions”.
The operator says it is delaying plans to add 1.5 million twenty-foot equivalent units (TEU) of capacity to Terminal 3 until 2017, while it is also slowing down construction of Terminal 4.
DP World group chairman and CEO Sultan Ahmed Bin Sulayem said in a statement that the decision to slow down expansion was due to the current market climate.
“At Terminal 4, we haven’t stopped construction. We will be ready to react if the customers feel that they will be increasing their business,” Sulayem said during a conference call with journalists, The National reports.
He did not however provide any new timeline for Terminal 4, a $1.6 billion project to boost capacity by 16% to 22.1 million TEU, which was originally planned for completion by 2018.
DP World also announced its financial results for the first half of 2016.
Revenues grew 10.2% in the first half of 2016 to $2.09 billion, supported by the acquisitions of Jebel Ali Free Zone (UAE) and Prince Rupert (Canada).
Adjusted EBITDA increased by 27.2% to $1.17 billion and adjusted EBITDA margins reached a high of 56.2% reflecting the Jebel Ali Free Zone acquisition and increased contribution from other higher margin locations.
The strong adjusted EBITDA growth also resulted in a 50.2% increase in profit. Cash from operating activities amounted to $905 million in the first half of 2016, up from $857 million recorded during the same period last year.
Sulayem added: “This financial performance has been achieved despite uncertain market conditions, which once again demonstrates the resilient nature of our portfolio. In 2016, we have invested $586 million of capex in key growth markets, and this investment leaves us well placed to capitalise on the significant medium to long-term growth potential of this industry.
“Looking ahead to the second half of the year, we expect throughput performance to improve, and like-for-like financial performance (excluding one-off items and foreign exchange movements) to be similar to the first half. Overall, the strong financial performance of the first six months leaves us well placed to meet full-year market expectations.”