DP World says 1H business up 16 percent at ports

By ADAM SCHRECK

DUBAI, United Arab Emirates

Dubai World's global port operator said Tuesday business jumped 16 percent in the first half of the year as the shipping industry showed signs of life following a severe slump caused by the global downturn.

Cargo volumes were up most sharply at ports DP World manages in Asia, Australia and parts of Europe, the port firm said. The company is the world's fourth-largest seaport operator, with a strong focus on the developing world.

DP World said the first-half performance was stronger than expected and should boost its annual profits. But its chief executive said it remains unclear whether the rapid growth can continue through the end of the year.

"We have to be very cautious if this growth is going to be sustainable," CEO Mohammed Sharaf told reporters.

The company said it handled the equivalent of 23.7 million standard 20-foot (6-meter) shipping containers between January and June. That is up from 20.4 million in the first half of last year.

While the second half of the year has traditionally been better for DP World's business, this year is harder to gauge because of the uncertain pace of the global economic recovery, Sharaf said.

He said the firm's shipping line customers were feeling optimistic through June, but are starting to take a more cautious stance.

That roughly matches the view across the industry, said Neil Davidson, who covers the port business for London-based advisory firm Drewry Shipping Consultants. After a strong first half, the industry is divided over whether the rebound represents a longer term trend or just a brief bump before another downturn.

"There is a lot of debate over what this first half really means," he said, because global trade levels are rising faster than the overall economy. "We're sort of at the turning point and we've started on an upward slope. Now it's a question of what sort of slope is that?"

DP World is one of Dubai's more profitable state-controlled businesses. It operates 50 cargo terminals on six continents, including the Middle East's largest in Dubai.

It is part of the city-state's struggling Dubai World conglomerate, but is exempt from that company's $23.5 billion restructuring effort.

Last month, DP World delayed a months-old plan to list its shares on the London Stock Exchange. Its shares already trade on the Nasdaq Dubai, which has struggled to attract significant interest from investors.

Sharaf said Tuesday the company remains committed to pursuing the secondary London listing, but intends to wait until its full-year results are released next year.

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Online: http://dpworld.com/