Global logistics solutions provider, DP World has unveiled the acquisition of several feeder and regional trade operators, amid the announcement of its half-year results.
Transworld Feeders FZCO, Avana Logistek Limited, including its subsidiary Avana Global FZCO, and Transworld Feeders Pvt. Ltd., the containerised Indian coastal and EXIM feeder shipping operations of Shreyas Shipping and Logistics Limited, excluding vessels and bulk operations are the latest companies, which DP World bought in the framework of its acquisition strategy.
“These new activities are in line with our strategy and complement our recent acquisitions of Feedertech and Perma Shipping,” said DP World chairman and chief executive officer, Sultan Ahmed Bin Sulayem.
This strategy has boosted the company’s revenue by 17.7% to US$4,076 million in the first half of the year, according to DP World financial results, while like-for-like revenue decreased by 11.6%.
A crucial reason for that decrease is the Covid-19 pandemic. The coronavirus crisis impacted expectedly DP World’s gross volumes, which have declined by 3.9% in the first six months of 2020.
In addition, DP World has reported huge losses of 58.5% in profit and a decrease of 4.8% in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation). Profit reached US$313 million, while adjusted EBITDA stood at US$1.5 billion.
The Emaar land sale in 2019 increased the previous year’s income, but removing the one-off boost to the company’s earnings, reduces the differential between the annual figures. Like-for-like revenue is then decreased by only 3.4%, adjusted EBITDA shows a slight gain of 1.1%, while profits fell by a significantly reduced figure.
“That demonstrates that we have managed costs efficiently,” the group’s chairman commented. “This outperformance once again demonstrates that we are in the right locations and a focus on origin and destination cargo will continue to deliver the right balance between growth and resilience.”
DP World stated it will continue to focus on strategy to deliver infrastructure led supply chain solutions to cargo owners. The efforts of the UAE-based logistics group are focused on digitising logistics and developed solutions for several verticals, according to Sulayem, who said that “cargo owners have responded positively” and DP World is “now delivering efficient solutions to customers, which bodes well for the future.”
Transworld Feeders FZCO and Avana Global FZCO are leading independent feeder and NVOCC (Non-Vessel Operating Common Carriers) operators, offering container feedering services and regional trade solutions connecting a wide range of ports in the Middle East, the Indian Subcontinent and Far East through their dense network.
Transworld Feeders Pvt. Ltd. and Avana Logistek Limited maintain a comprehensive coverage of all main ports, terminals and inland destinations in India. Avana Logistek Limited also provides delivery solutions within the Indian domestic market.
“We now have the capability to offer superior connectivity between Asia, the Indian Subcontinent, the Middle East, and East Africa, and this greater scale and comprehensive network presence will allow us to reduce inefficiencies in the supply chains to the benefit of all our customers,” noted Sulayem.
In 2020, DP World de-listed its equity from the stock exchange and returned to private ownership. “We believe this long-term approach to business is not aligned with the short term thinking of equity markets and consequently, the next stage of DP World’s development will take place as a private company,” stated DP World.
The Dubai-based firm added that it is now focusing on the safety of its employees, integration of its recent acquisitions to drive synergies, containing costs to protect profitability and managing growth and capital expenditures (CAPEX ) to preserve cashflow.
Antonis Karamalegkos
Editor
