Cargo volume up 11 percent at port firm DP World

AP News
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Posted: Jul 26, 2011 8:47 AM
Cargo volume up 11 percent at port firm DP World

DP World, the Dubai port operator, said Tuesday that cargo volumes at its docks rose 11 percent in the first half of the year as trade picked up at home and in other emerging economies.

The world's third-largest seaport operator said it handled the equivalent of 26.2 million standard 20-foot shipping containers between January and June _ a 2.5 million container increase over the same period last year.

The cargo handler said strong growth in Asia, Africa, the Americas and its home market of the United Arab Emirates fueled the gains. Additional capacity at ports in Peru and China also helped push volumes higher.

DP World has operations at 49 sea cargo terminals on six continents.

As a result of the increased volumes, the company said it expects to enjoy a "significant improvement" in first-half profit earnings, as compared to a profit of $219.2 million in the first half of last year. Figures are due out Aug. 25.

The company cautioned that the outlook for the rest of this year remains murky, however.

"As we go into the second half of the year, there is some uncertainty around the global economy making it difficult to forecast how global trade will develop," Chief Executive Mohammed Sharaf said. The company traditionally sees higher volumes in the back half than the first, he said.

DP World is seen as one of the most profitable and best run of Dubai's many state-controlled companies. It is part of the city-state's troubled Dubai World conglomerate, but was excluded from that company's $25 billion debt restructuring effort.

DP World did not provide a breakdown of business at each of its ports. It said volume in its home UAE market, which includes Dubai's Jebel Ali port, the Mideast's biggest, rose 11 percent to 6.1 million containers.

The port operator last week announced it was extending its presence in South America by buying controlling stakes in two seaport companies in Suriname.

In a conference call with reporters, DP's chief said the company continues to seek new acquisition opportunities, particularly in emerging markets, and would consider trying to once again enter the U.S. market if the deal is right.

DP World abandoned plans to acquire operations at several North American ports in 2006 after the bid sparked a political firestorm in the United States. At the time, several U.S. lawmakers expressed concerns about Mideast ownership and port security even though the Bush administration had signed off on the deal.

"The U.S. market is something we have continually said we will go back to at the right time. ... We'll continue to watch, and if we get the right product at the right time, certainly we'll be there," said Sharaf.