VIP Interview: DP World
Group chair and CEO of DP WORLD Sultan Ahmed Bin Sulayem, reflects on the operators greatest achievements of 2016 and speaks to Logistics News ME about the plans for New Brunswick, Heathrow and Jebel Ali
How did business perform in 2016 compared to 2015?
We were pleased to announce a strong set of first half results, with 50% year-on-year earnings growth and 56% adjusted EBITDA margins. The more modest like-for-like earnings growth is a reflection of the challenging trade environment. This financial performance has been achieved despite uncertain market conditions, which once again demonstrates the resilient nature of our portfolio. In the first half of 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.
What was your greatest challenge in 2016 and how did you overcome it?
Weve faced the same challenges as our industry peers lower commodity prices, currency fluctuations and political issues. This has had an impact on trade growth but we remain positive on the medium and long term growth outlook for our industry. We have maintained the existing shape of our ports portfolio that has a 70% exposure to origin and destination cargo and 75% exposure to faster growing markets. This positioning has allowed us to deliver both earnings growth and shareholder value over the long term. We believe our portfolio is well positioned to continue to outperform the market and we remain focused on delivering relevant new capacity in the right markets through disciplined investment, improving efficiencies and managing costs to drive profitability.
Which ambitions head DP Worlds plans for 2017?
We seek opportunities across the globe where we can add value and where our customers want us to be. And we have been busy: In Canada with the recent announcement of an investment vehicle in partnership with Caisse de dépôt et placement du Québec (CDPQ), one of North Americas largest pension fund managers. The investment platform totals $3.7bn, with DP World holding a 55% share and CDPQ the remaining 45%.
Earlier in the year we also won concessions to operate the Fairview Terminal in Prince Rupert on the west coast US and Port St John in New Brunswick on the east coast.
Elsewhere in the world there were other highlights. In Ecuador to develop the Port of Posorja and an associated logistics zone to transform it into a regional trading hub; Taiwan with an MoU for Kaohsiung Port Terminal 7; Berbera in Somaliland; Cyprus; Kazakhstan all evidence of our active global footprint, which we look forward to developing further in 2017 should the right opportunities arise.
Meanwhile, at DP World London Gateway in the UK we believe the addition of the third berth, which is expected to be operational in the first quarter of 2017, will make the product even more compelling for our key customers.
We will also continue to work on our expansion plans at our flagship Jebel Ali Port in Dubai 1.5 million TEU will be added to Terminal 3 in 2017. Terminal 3 will have a capacity of 4 million TEU and will be the worlds largest semi-automated facility once operational. As a global trade enabler its essential that any development to our business is highly strategic and our business development team maintains a very close working relationship with all company divisions to identify areas of potential growth. This approach allows us to develop under-served trade routes as well as carry origin and destination cargo which delivers higher margins to our customers. At the same time, we continue to add capacity where needed and we are also always exploring the role of disruptive innovation (e.g. Hyperloop) in future trade.