DP World holds third terminal expansion

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Jun 2009

DP World, the world's largest port operator, has delayed the expansion of its $1.5 billion (Dh5.5bn) third terminal in Jebel Ali owing to a lacklustre global economic environment, a company official has confirmed to Emirates Business. "In response to the current market, we are deferring expansion plans on the third terminal in Jebel Ali until such time as market demand returns," said a DP World spokesperson.
"We successfully completed the expansion of Terminal 2 in Jebel Ali as scheduled in the first quarter of this year, taking capacity there to around 11 million TEUs," the spokesperson added.
A recent report from the Kuwait Financial Centre (Markaz) said DP World's profits will decline by 54 per cent during 2009, from $572 million in 2008 to $265m, and a 24 per cent decline in its revenues for the year.
"The unpredictable trends in global trade have continued into 2009 resulting in a volume decline across our business of 10 per cent for the first four months of the year," the DP World official confirmed.
Trade volumes across the world were down 15 per cent in the first quarter of this year, their steepest fall since 1991. Despite the Dubai giant's plans to defer new capacity this year, the estimated utilisation rate is expected to drop close to 80 per cent (from 86 per cent in 2008) this year, according to the Markaz report.
"To overcome the current challenging markets, we have undertaken cost-containment and cash generation. We have deferred about 50 per cent of our capacity expansion plans until market demand returns," the official said. "As for lowering ports charges, this decision differs from terminal to terminal."

Source: Emirates Business