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DUBAI—DP
World Ltd., the world’s fourth-largest port operator,
may this week report first-half profit doubled on
African acquisitions and greater handling capacity at
its Dubai hub even as the world’s biggest economies
slow.
The
45-terminal operator’s net income may reach $244.3
million when it reports August 28, according to the
average estimate of three analysts surveyed by
Bloomberg. The Dubai state-controlled firm said its
profit for the same period in 2007 was $111.2 million
before separately disclosable items.
“The
company’s first-half growth is driven by an increase in
cargo handling, especially in Jebel Ali, and
acquisitions in Africa and Saudi Arabia,” analyst
Muneeba Kayani at Morgan Stanley said in an e-mail. The
Dubai-based analyst has an “equal-weight” recommendation
on the stock.
Dubai is
spending billions of dollars on finance, tourism and
infrastructure projects to cut its dependence on oil
revenue and build the emirate into a new global hub. DP
World’s $4.96- billion public share sale in November,
the Middle East’s largest, has left investors
disappointed as its shares have dropped 35 percent to
$0.85 since listing on the Dubai International Financial
Exchange Ltd. in November.
DP World
last month reported container volume jumped 21 percent
in the first half, helped by growth in India and the
Middle East.
In 2007
the United Arab Emirates (UAE) company gained control of
Egypt’s Sokhna Port at the southern entrance to the Suez
Canal, its third on the Red Sea after Jeddah in Saudi
Arabia and Djibouti, East Africa. This year it plans to
raise the capacity of its base at Jebel Ali port by more
than a quarter.
“DP
World operates in regions that are expected to witness a
rapid increase in utilization rates and shortage in
capacity,” Kareem Murad, a Dubai-based analyst at Shuaa
Capital PSC who recommends buying the stock, said in an
e-mail. “This means margins will improve, significantly
reflecting positively on the company’s earnings.”
The port
operator now has terminals in 29 countries from Senegal
to China, whose economy expanded 11.9 percent this year.
The UAE economy will expand 7 percent this year,
according to a Bloomberg survey.
A year
since the US housing slump sparked about $500 billion in
credit-market losses for banks globally, the world’s
largest economies are all stumbling as rising borrowing
costs combine with record commodity prices to sap
growth. The US is close to a recession and the economies
of France, Germany and Japan all contracted in the
second quarter.
At the
25 terminals where DP World is a majority owner or has
management control, volume rose 21 percent to 13.6
million 20-foot containers in the first half. Hong
Kong’s Hutchison Port Holdings Ltd., Singapore’s PSA
International Pte. and A.P. Moeller-Maersk of Denmark
are DP World’s main competitors.
Tamweel
PJSC, the United Arab Emirates’ largest mortgage
provider, dropped 5.4 percent, ending the week at 5.78
dirhams. The shares fell to the lowest close since
November 4 even after the company denied it’s being
investigated by Dubai police in a probe that resulted in
the arrest of its former chief executive officer Adel Al
Shirawi and former head of investments Feras Kalthoum.
(Bloomberg) |
