DP WORLD ANNOUNCES RESILIENT 1H2023 RESULTS

WITH ADJUSTED EBITDA of $2.6 BILLION

Dubai, United Arab Emirates, 17 August 2023: DP World Limited today announces resilient financial results for the first six months to 30 June 2023. On a reported basis, revenue grew by 13.9% to $9,037 million and adjusted EBITDA⁵ grew by 7.0% to $2,611 million with adjusted EBITDA margin⁶ of 28.9%.

Results Highlights

Ø Revenue increased by 13.9% to $9,037 million

§ Revenue growth of 13.9% is mainly attributable to the full six months consolidation of Imperial Logistics (2022 - 4 months).

§ Like-for-like growth driven mainly from strong performance of Imperial Logistics in Africa and Drydocks World in UAE.

Ø Adjusted EBITDA increases 7.0% to $2,611 million

§ Adjusted EBITDA grew 7.0% on higher revenue growth and EBITDA margin for the year stood at 28.9%. Like-for-like adjusted EBITDA margin stood at 30.8%.

Ø Cash generation remains robust, Balance sheet strong

§ Net cash generated from operating activities stood at $1,951 million 1H 2023 (compared to $1,931 million in 1H 2022).

§ Leverage (Net debt to adjusted EBITDA) on a pre-IFRS16 basis stands at 2.8x (FY2022: 2.7x). On a post-IFRS16 basis, net leverage stands at 3.2 times compared to 3.0 times in FY2022.

Ø DP World credit rating improves to BBB+ with Stable Outlook

§ DP World's credit rating improved by two notches by Fitch to BBB+ with Stable Outlook and one notch by Moody's to Baa2 with Stable Outlook on improved financial performance and a stronger balance sheet.

§ DP World is committed to a strong investment grade rating in the medium term.

Ø Selective investment in key growth markets 

§ Capital expenditure of $910 million ($741 million in 1H 2022) was invested across the existing portfolio.

§ Capex split: $412 million Ports and Terminals, $284 million Logistics and Parks and Economic Zones, $187 million Marine Services and $27 million in Head Office.

§ Capital expenditure guidance for 2023 is for approximately $2.0 billion to be invested in UAE, Jeddah (Saudi Arabia), London Gateway (United Kingdom), Dakar (Senegal), Callao (Peru) and DPW Logistics (South Africa).

Ø DP World focused on driving revenue synergies and building long-term relationships with cargo owners

§ Enhanced logistics portfolio offers value-add capabilities in fast-growing markets and verticals.

§ DP World aims to deliver supply chain solutions to cargo owners by leveraging its best-in-class infrastructure

§ Group is well-positioned to capitalize on the growing demand for customised solutions in the logistics industry.

Ø Committed to transition to net zero in line with UAE 2050 Initiative

§ Investment in renewable energy through the I-REC program has resulted in 47% reduction in DP World UAE carbon emissions.

§ Committed to investing more than $500 million to reduce CO₂ emissions by 700k tonnes in the next 5 years.

Ø Resilient 1H 2023 performance, outlook remains uncertain

§ Solid 1H 2023 performance but outlook remains uncertain due to geopolitics, inflationary environment, higher interest rates and currency fluctuations.

§ DP World remains positive on the medium to long-term outlook for global trade and is focused on delivering integrated supply chain solutions to cargo owners to drive sustainable returns.

DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented:

We are pleased to share a resilient set of results for the first half of 2023, with our adjusted EBITDA enhancing by 7.0% to surpass $2.6 billion. Despite facing a softer container market and weakened freight rates amid challenging economic conditions, our focus on high-margin cargo, end-to-end bespoke supply chain solutions and cost optimization has been crucial in securing these results. This strategy has not only been effective during these challenging times but also lays the foundation for our sustainable long-term growth and returns.

Our logistics vertical has demonstrated robustness in this demanding economic landscape, attracting more cargo owners to our platform. The positive feedback to our end-to-end product emphasis the value of our customised solutions enables customers to conduct trade more effectively. Strategic investments in high-growth sectors enable us to provide value-added solutions, and we remain committed to continuously enhancing our logistics platform. This includes addressing supply chain inefficiencies and enhancing connectivity in crucial trade lanes to serve cargo owners better.

Notably, we continue to make substantial progress towards our 2050 net zero carbon target. Our recent investment in renewable energy through the I-REC program has significantly cut DP World UAE business carbon emissions by 47%. We are confident of achieving our goal to cut CO2 emissions by 700k tonnes which accounts for approximately 22% of our total emission within the next five years.

In summary, our balance sheet remains robust, and we continue to generate high levels of cash flow, which provides us the flexibility to invest in the growth of our existing portfolio and new investment opportunities when they arise. While the near-term trade outlook may be uncertain due to macroeconomic and geopolitical factors, the solid financial performance of the first six months positions us well to deliver a steady set of full-year results. We remain optimistic about the medium to long-term prospects of the industry and DP World's capacity to consistently generate sustainable returns.

- END -

Investor Enquiries

Redwan Ahmed                                                                              Amin Fikree

DP World Limited                                                                           DP World Limited

Mobile: +971 50 554 1557                                                             Mobile: +971 56 6811553

Direct:  +971 4 808 0842                                                              Direct : +971 4 808 0923

[email protected]                                              [email protected]

17th August 4:00pm UAE, 1:00pm UK Call with Video Conference

Ø Conference call for analysts and investors hosted by Yuvraj Narayan, Group Deputy CEO & CFO and Board Member.

Ø A playback of the call will be available after the conference call concludes. For the dial in details and playback details please contact [email protected].

The presentation accompanying the conference call will be available on DP World's website within the investor centre under Financial Results on https://www.dpworld.com/investor-relations/financials-presentation/investor-presentations from approximately 9am UAE time.

Forward-Looking Statements

This document contains certain "forward-looking" statements reflecting, among other things, current views on our markets, activities, and prospects. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur and which may be beyond DP World's ability to control or predict (such as changing political, economic or market circumstances). Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of DP World speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Except to the extent required by law, DP World does not undertake to update or revise forward-looking statements to reflect any changes in DP World's expectations with regard thereto or any changes in information, events, conditions or circumstances on which any such statement is based.

Group Chairman and CEO Statement

Resilient performance in challenging markets

The global economy in 2023 faces numerous challenges, including slowing growth, inflationary pressures, higher interest rates, currency fluctuations, and heightened geopolitics. Due to this weak economic backdrop, trade growth was forecast to soften in 2023, leading to a marginal decline in container volumes as consumers tightened their belts. Additionally, supply chain bottlenecks that emerged post-COVID began to unwind in the second half of 2022, causing freight rates to return to pre-COVID levels and resulting in weaker growth for logistics.

Despite these challenges, our business demonstrated remarkable resilience. Achieving like-for-like growth in a declining market is a testament to the hard work of our team.

Robust performance in Ports & Terminals

DP World containers volumes increased by 3.1%^[8]  compared to a market decline of 2.0%^[9]  as our portfolio once again outperformed the industry, which demonstrates that we have relevant capacity in the right locations. A strong performance from Asia Pacific was the key driver of growth, while Americas and Europe were softer due to the weaker economic environment.  Encouragingly, Jebel Ali (UAE) continues to deliver a steady performance.

Our strategic approach of adding capacity in high-margin cargo locations and investing in automation continues to be a key differentiator as we continue to focus on markets with strong supply-demand dynamics.

Logistics continues to deliver growth 

In our Logistics vertical, we have focused on driving revenue synergies and adding new capabilities, which has resulted in new business opportunities. Furthermore, we have worked tirelessly on cost efficiencies which has helped protect margins in this inflationary period.

DP World continues to remove inefficiencies across the supply chain to provide improved connectivity in fast-growing trade lanes. The demand for bespoke supply chain solutions continue to rise as cargo owner's demands shift, and DP World is well placed to benefit from these developments.

In terms of innovation, we have developed new products like Cargoes Flow, DP World Trade Finance, and Cargoes Logistics, making trade easier for cargo owners, especially SMEs. Our commitment to building intelligent platforms for efficient solutions remains steadfast.

Marine Services providing critical connectivity

Our Marine Services vertical, particularly Unifeeder, which offers efficient and sustainable transport solutions, continues to provide critical connectivity for shipping lines and cargo owners. While near-term profitability was impacted by freight rates returning to pre-COVID levels due to unwinding supply chain bottlenecks, strong performances from Drydocks World and P&O Maritime Logistics have offset some of the weakness.

We have expanded our Marine Services business in new geographies in recent years, including Asia, the wider Indian Subcontinent, the Middle East, and Latin America. This expansion has enabled us to serve our customers better, increase our market share, and offer more opportunities for growth.

Decarbonisation is a core focus as we transition to net zero by 2050

Decarbonization is a core focus as we transition to achieve net zero carbon emissions by 2050. In line with our 'Our World, Our Future' sustainability strategy, we are committed to building, protecting, and maintaining DP World's sustainable operations, economically, socially, and environmentally. Notably, we have achieved a significant 47% reduction in DP World's UAE carbon emissions through our renewable energy program. Our efforts have been recognized, earning us a top performer ranking by Sustainalytics and a leadership score (A-) from the CDP Climate Change submission.

To continue our progress, we have committed to investing over $500 million in cutting CO2 emissions by 700k in the next 5 years, which accounts to approximately 22% of our total emissions. However, we acknowledge that there is more to achieve, and we remain steadfast in our determination to reach the net zero target by 2050, aligning with the UAE's 2050 strategic initiative. 

Group Deputy CEO & CFO Review

DP World has delivered a robust set of first half 2023 results with steady adjusted EBITDA growth of 7.0% to $2,611 million. The adjusted EBITDA margin remained broadly stable as our cost optimization projects help protect profitability.

Reported revenue grew by 13.9% to $9,037 million as the Group benefitted from the full year contribution of acquisitions while like-for-like revenue grew by 7.1% driven by growth in Logistics as our revenue synergy plans begin to attract new customers.  Operating profit grew by 8.2% to $1,603 million which was also up 6.1% on a like-for-like basis.

The strengthening of DP World's balance sheet in 2022 has resulted in the Company's credit rating being upgraded by Fitch by two notches to BBB+ with a Stable outlook while Moody's upgraded by one notch to Baa2 with Stable Outlook.   

Asia Pacific and India

As anticipated, the Asia Pacific and India financials was impacted by a weaker performance in Marine Service (Unifeeder ISC) which saw its profitability decline due to lower freight rates. The unwinding of supply chain bottlenecks has resulted in the normalisation of ocean freight rates to pre-covid levels. We anticipate more stability in future performance. In contrast, Ports and Terminals delivered a robust performance with the focus on high margin cargo continuing to drive growth in profitability.

Overall, revenue declined by 16.9% on a reported basis which resulted in adjusted EBITDA of $315 million.

We invested $85million in Asia Pacific & India, mainly focused in Cochin & Logistics business in India.

Middle East, Europe and Africa

We saw a strong performance in Middle East, Europe and Africa region aided by Logistics. Our focus on revenue synergies continues to attract new customers, while our cost optimisation projects have protected profitability. Performance of Ports and Terminal was steady as a solid performance in Middle East and Africa compensated softer volumes in Europe.  Marine Services performance was bolstered by a strong performance at Drydocks World (DDW) and P&O Maritime and Logistics (POML) due to new contract wins and higher charter rates. Improvements at P&O Ferries also contributed to the uplift.  

Total reported revenue increased by 25.7% to $6,528 million mainly attributable to the full six months consolidation of Imperial Logistics (2022 - 4 months) while like-for-like revenue grew 14.2%. Adjusted EBITDA reached $2,060 million, up 20.1% on a like-for-like basis.  EBITDA margins remained healthy at above 30%.

We invested $681 million region, mainly in UAE, Imperial Logistics (Africa), Jeddah (Saudi Arabia), Sokhna (Egypt), London Gateway (UK) and Constanta (Romania).

Australia and Americas

Market conditions in the Australia and Americas have demonstrated mixed trends. The performance of Ports and Terminals in the Americas has been affected by softer consumer demand. In contrast, Australia has shown resilience amidst these challenges and has maintained a more robust performance. Meanwhile, the Logistics segment in these regions has exhibited steady performance. While there are complexities in the current market conditions, we continue to adapt and strive to maintain our solid performance.

Total reported revenue was broadly flat at $1,416 million, while adjusted EBITDA declined by 7.8% to $441 million. EBITDA margins remained at above 30%.

We invested $117 million in capital expenditure in Australia & Americas, mainly in Callao (Peru), syncreon (USA), Caucedo (Dominican Republic).

Cash Flow and Balance Sheet

Adjusted gross debt (excluding bank overdrafts and loans from non-controlling shareholders) stands at $19.2  billion compared to $18.5 billion as of 31 December 2022. Lease and concession fee liabilities account for $4.5 billion, with interest-bearing debt of $14.7 billion as of 30 June 2023.  Cash and cash-equivalents on the balance sheet stood at $3.4 billion, resulting in net debt of $15.8 billion or $11.3 billion (on a pre IFRS 16 basis). Our net leverage (adjusted net debt to adjusted EBITDA) stands at 3.2 times on post-IFRS16 basis and would be 2.8x on pre-IFRS16 basis. Cash generation remained solid, with cash from operations steady at $2.5 billion (1H 2022: $2.2 billion).   

Capital Expenditure

Consolidated capital expenditure in the first half of 2023 was $910 million, with maintenance and replacement capital expenditure of $298 million. We expect the full-year 2023 capital expenditure to be approximately $2.0 billion, which will be invested in UAE, Jeddah (Saudi Arabia), London Gateway (United Kingdom), Dakar (Senegal), Callao (Peru), Marine Services (P&O Ferries) and Imperial Logistics (South Africa).

Net finance costs before separately disclosed items

The net finance cost for the six months increased to $505 million compared to prior period at $373 million. Increase is mainly due to higher average debt and increase in effective interest rates during the period.

Taxation

The tax expense relates to the tax payable on the profit earned by overseas subsidiaries, as adjusted in accordance with the taxation laws and regulations of the countries in which they operate. For the first six months of 2023, DP World's income tax expense before separately disclosed items was $213 million (1H 2022: $224 million).

DP World UAE subsidiaries are subject to UAE corporation tax from 1 January 2024 even though UAE CIT legislation is now in force. No deferred tax is recognized in 1H 2023 in relation to Group level adjustments pending further clarifications  from  the relevant UAE tax authorities.

Profit attributable to non-controlling interests (minority interests)

Profit attributable to non-controlling interests (minority interests) before separately disclosed items was $235 million against 1H 2022 of $163 million mainly due to increase in minority interests in Jebel Ali (UAE).

DP WORLD 1H2023 THROUGHPUT

DP World handled 20.3 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in the second quarter of 2023, with gross container volumes increasing by 0.5% year-on-year on a reported basis and 2.6% on a like-for-like basis.

In the first half of 2023, DP World handled 39.9 million TEU on a gross basis with container volumes increasing by 0.9% year-on-year on a reported basis and up 3.1% on a like-for-like basis. Jebel Ali (UAE) handled 3.6 million TEU in 2Q2023, on par year-on-year.

At a consolidated level, our terminals handled 11.6 million TEU in 2Q2023 up 0.1% on a reported basis and down 1.7% like-for-like basis.  In the first half of 2023, DP World handled 23.0 million TEU, with container volumes increasing by 0.4% year-on-year on a reported basis and decreased 1.5% on a like-for-like basis.

About DP World: 

Trade is the lifeblood of the global economy, creating opportunities and improving the quality of life for people around the world. DP World exists to make the world's trade flow better, changing what's possible for the customers and communities we serve globally. 

With a dedicated, diverse and professional team of more than 106,500 employees from 158 nationalities, spanning 73 countries on six continents, DP World is pushing trade further and faster towards a seamless supply chain that's fit for the future.

We're rapidly transforming and integrating our businesses -- Ports and Terminals, Marine Services, Logistics and Technology - and uniting our global infrastructure with local expertise to create stronger, more efficient end-to-end supply chain solutions that can change the way the world trades.

What's more, we're reshaping the future by investing in innovation. From intelligent delivery systems to automated warehouse stacking, we're at the cutting edge of disruptive technology, pushing the sector towards better ways to trade, minimising disruptions from the factory floor to the customer's door.

WE MAKE TRADE FLOW

TO CHANGE WHAT'S POSSIBLE FOR EVERYONE

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