DP World interim profit more than halves amid Red Sea disruptions

Dubai — Dubai-owned ports and logistics company DP World reported a 59% drop in first-half profit on Thursday as it grappled with shipping disruptions in the Red Sea linked to the ongoing Israel-Hamas war in Gaza.

Analysts say Middle East ports like those in the Gulf have lost out on trans-shipment traffic as ocean freight firms reroute ships around the southern tip of Africa to avoid missile and drone attacks in the Red Sea, carried out by Yemen’s Houthi militants since October.

Overall profit attributable to DP World’s owners fell to $265m in the six months to June 30 from $651m a year earlier.

DP World said the Red Sea crisis had driven up operational costs and caused disruptions.

In the Middle East, Africa and Europe, it recorded a 1.9% like-for-like decline in container volumes, as Red Sea ports including Jeddah in Saudi Arabia and Sokhna in Egypt were affected.

However, volumes rose at the flagship Jebel Ali port in Dubai, where there was a significant increase in out-of-schedule vessel calls due to the disruption.

The state-owned conglomerate said the knock-on impact on its Northern European operations from the crisis as well as investments in its freight forwarding platform had also contributed to a 4.3% fall in adjusted core profit to about $2.5bn for the six months.

DP World, which manages ports in countries from Britain to Peru as well as operating warehousing and logistics parks, said overall revenue rose 3.3% to $9.34bn, with consolidated container volumes up 3.7% on a like-for-like basis.

Revenue from the company’s logistics business fell 2%, while marine services saw a half-year revenue decline of 4.1%.

The company said it was confident about the second half of the year, citing factors such as a “solid pipeline” of new business for its logistics division as well as signs of improvement at some ports affected by the Red Sea crisis.

Reuters