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| Name | Symbol | Market | Type |
|---|---|---|---|
| Dp World 37 | LSE:58UT | London | Medium Term Loan |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 123.45 | 0 | 01:00:00 |
Hot Features
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RNS Number:7181R
DP World Limited
07 April 2008
DP WORLD LIMITED
PRELIMINARY RESULTS FOR THE 12 MONTHS TO 31 DECEMBER 2007
Dubai, 7 April, 2008: - DP World today announced excellent results from its
portfolio of 42 marine terminals for the year ended 31 December 2007 - a year
that included significant growth for the company. New developments were won and
planned capacity expansions came on line, allowing DP World to keep pace with
the expanding needs of its customers globally.
Highlights(1)
o Strong revenue growth of 32% to $2,731 million
o EBITDA(2) increased 56% to $1,100 million with margins increasing to 40.3%
o Profit after tax for continuing operations for the year increased 52%
to $420 million
o Net cash from operating activities of almost $1 billion
o Pro forma earnings per share of 2.26 cents(3)
o Dividend of 1.33 cents per share
DP World Chairman Sultan Ahmed Bin Sulayem said;
"This is an excellent set of results driven by DP World's well positioned
portfolio which benefits from the strong Asia to European trade routes and the
growth of container cargo in the faster growing economies of the emerging
markets. This is a trend we expect to continue.
"This outstanding result, a 52% growth in profits, was achieved at the same
time as the company made significant business wins and undertook an initial
public offering. DP World also successfully accessed the international debt
market for the first time during the year. We have now built an excellent
financial platform to support our future growth.
"DP World continues to invest for the company's future growth. Taking the
capital intensive nature of our business into consideration, but acknowledging
that we are a financially strong company with the ability to finance our
existing pipeline of 13 new developments, the Board is recommending a greater
than expected dividend of 1.33 cents per ordinary share for the full year 2007.
"Trading in the first two months of 2008 has been strong with throughput well
ahead of the same period last year. Whilst it is still early in the year, and
growth across global markets remains uncertain, we believe we are well placed to
deliver good results this year. "
DP World Chief Executive Mohammed Sharaf said:
"2007 saw DP World move to become a pure port operator. We entered new markets
in Africa - Senegal and Egypt - and won approval to develop two new ports in
capacity-constrained northern Europe with London Gateway and Maasvlakte 2,
Rotterdam.
"Our volumes increased well ahead of the market during 2007, growing 18%
against an expected 12.2%(4) for the global market overall. Our flagship port,
DP World Jebel Ali, grew to become the world's seventh largest port, handling a
record 10 million TEU.
"Our strong financial performance in the first half of 2007 continued into the
second half showing profits more than doubling in the second half to report a
2007 profit of $420 million for the year. EBITDA growth continued, and our
EBITDA margins increased to 40% reflecting higher capacity utilisation, improved
efficiencies and productivity across all our terminals."
- END -
NOTE TO EDITORS
Full financials and accompanying commentary are available at www.dpworld.com
Media Inquiries
Sarah Lockie, DP World +971 48080835
Tom Mollo, Bell Pottinger +971 505504203
Investor Inquiries
Fiona Piper, DP World +971 48080725 or +971 504220405
Analyst Presentation
There will be a presentation to analysts at 12 noon at The Monarch Hotel, Dubai
with dial-in facilities for those unable to attend. A playback of this will be
available two hours after the end of the call on the company's website at
www.dpworld.com.
In addition, there will be a conference call for debt investors at 1600 hours
Dubai time and the dial in details are
Both calls can be accessed through this number and the accompanying slide show
will be available on our website
* 0800 953 0844 for those calling from the UK
* +44 1452 562 716 for those calling from overseas
About DP World
DP World is one of the largest marine terminal operators in the world, with 43
terminals and 13 new developments across 28 countries(5). Its dedicated,
experienced and professional team of nearly 30,000 serves customers in some of
the most dynamic economies in the world.
DP World aims to enhance customers' supply chain efficiency by effectively
managing container, bulk and other terminal cargo.
The company constantly invests in terminal infrastructure, facilities and
people, working closely with customers and business partners to provide quality
services today and tomorrow, when and where customers need them.
In taking this customer-centric approach, DP World is building on the
established relationships and superior level of service demonstrated at its
flagship operations at Jebel Ali, in Dubai. Jebel Ali has been voted "Best
Seaport in the Middle East" for 13 consecutive years. DP World's international
achievements were recognised in 2006, when Lloyd's List's awarded it the
prestigious Port Operator of the Year Award.
In 2007, DP World handled more than 43.3 million TEU (twenty-foot equivalent
container units) across its portfolio from the Americas to Asia - an increase of
18% on 2006. It has global capacity of more than 54 million TEU, which is set to
increase significantly in coming years with a committed pipeline of expansion
and development projects in key growth markets, including India, China and the
Middle East.
Chairman's Statement
DP World performed strongly in 2007, delivering increased profits and adding
value for customers. Our strong financial performance in the first half of 2007
continued into the second half, with profits more than doubling over that period
to record a 2007 profit of $420 million, 52% growth over 2006.
Our terminals continued to handle volumes significantly ahead of global
container trade growth, estimated at 12.2%(6), growing 18% to 43.3m TEU (twenty
foot equivalent container units), with utilisation rates in excess of 80%,
reflected in improved EBITDA margins. We remain focused on the more stable and
profitable origin and destination cargo, which accounts for 76% of our 2007
throughput.
During 2007, we added four new terminals or terminal developments to the
portfolio with the aim of ensuring we are well positioned to provide quality
services to our customers in the future.
Strategy
DP World's strategy continues to centre on providing our customers with
exceptional service globally while delivering profitable growth.
The additions to our portfolio during 2007 are consistent with our strategy of
ensuring we are where our customers want us to be, and investing for the long
term, stimulating growth in developed and emerging economies to produce solid
returns over time. However, our strategy is also to grow our business by making
the most of the facilities we have within our portfolio to meet customers'
expanding needs, improving productivity and efficiency of existing assets and
developing our facilities further where it is possible.
Board Appointments
The DP World Limited Board was constituted during 2007 as part of the
preparations for the initial public offering (IPO) of shares. We were delighted
that Sir John Parker, Vice Chairman, David Williams and Davy Ho all accepted the
roles of independent non-executive directors on the new Board.
Dividend
DP World is investing for the company's future growth to ensure we are
represented in the countries and ports our customers need us to be in, not just
today, but for the future. Taking the current capital intensive nature of our
business into consideration, but acknowledging that we are a financially strong
company with the ability to finance our existing pipeline of 13 new
developments, the Board is recommending a greater than expected dividend of 1.33
cents per ordinary share for the full year 2007.
Subject to approval by shareholders, the dividend will be paid on 2 June 2008 to
ordinary shareholders on the register as at 29 April 2008, with an ex-dividend
date of 25 April 2008.
Outlook
The container terminal industry has historically recorded growth of three to
four times global GDP growth. DP World has historically outperformed the
container terminal industry growth largely due to a portfolio which is
strategically focused on faster growing markets. We believe this trend will
continue.
Expanding our existing portfolio remains key and we continue to see plenty of
opportunities across all regions, both existing port operations and new
developments. We are confident we will continue to win new opportunities during
the course of this year at the same time as progressing our current strong
pipeline of expansion and development projects.
Trading in the first two months of 2008 has been strong with throughput well
ahead of the same period last year. Whilst it is still early in the year, and
growth across global markets remains uncertain, we believe we are well placed to
deliver good results this year.
Sultan Ahmed Bin Sulayem
Chairman
Operational and Financial Review
Introduction
During 2007 DP World restructured to become a pure ports operator, operating 42
terminals across 22 countries, with a pipeline of 13 new developments set to
increase capacity substantially over the next 10 years. As part of this
restructuring process, which took place before the company undertook the initial
public offering in November 2007, we transferred or sold assets that did not
enhance our port operating business or meet our strategic objectives.
All financial information relating to these continuing operations is reported
before separately disclosable items and where commentary is provided in respect
of 2006 it is on a pro forma basis for that same continuing business of 42
terminals and 13 new developments.
Review of Operational and Financial Results for Continuing Operations
2007 was another year of strong growth for DP World, with the company continuing
to record strong throughput growth to 43.3 million TEU, ahead of the market, and
increasing DP World's market share.
Our 18% throughput growth, against the market growth of just over 12%, reflects
our ability to attract new vessel calls and therefore greater volumes through
our terminals as a result of greater efficiency and productivity in our
terminals. In addition, over 70% of our terminals are located in the faster
growing emerging markets.
We continued implementing our strategy to match capacity to customers' increased
demands and during the year grew capacity by 12% following major expansion
projects at Qingdao (China) in the first half of the year and at Jebel Ali (UAE)
in the second half of the year. Smaller expansion projects were completed at
Vancouver (Canada), Southampton (UK), Constanta (Romania) and Chennai (India)
taking our capacity for 2007 to 54.2 million TEU.
Meanwhile, we continue to make progress on our existing pipeline of 13 new
developments, which are developing in line with our rollout plans with the
earliest coming on stream in 2009. The construction of our ports in Callao
(Peru) and Yarimca (Turkey) begin in the first half of this year.
Adding to our strong volume growth for 2007 were our four new terminal wins, a
blend of greenfield sites and operating businesses with existing cash flows. We
established a critical footprint in Africa (Dakar, Senegal and Sokhna, Egypt)
and will add much needed capacity in congested northern Europe (London Gateway,
UK and Rotterdam, the Netherlands). A joint venture agreement was also signed
with Abu Dhabi Port Authority during 2007 to consult on the development of the
new Port Khalifa (UAE).
2006 pro forma 2007
before separately disclosable items
Gross Throughput (TEU) 36.8 million 43.3 million
Consolidated Throughput (TEU) 20.6 million 24.0 million
Revenue $2,076 million $2,731 million
EBITDA (including JVs and Associates) $705 million $1,100 million
EBITDA Margin 34% 40 %
(including JVs and Associates)
Share of JVs and Associates $28 million $108 million(7)
Pre-tax profit from continuing businesses $188 million $509 million
Profit after tax for the year $276 million $420 million
Our financial results for the full year 2007 built on the strong performance in
the first half of the year, with results in the second half more than doubling
as terminals continued to push for efficiencies and win new volumes.
Revenue from continuing operations for our consolidated ports portfolio was
$2,731 million against our 2006 pro forma revenue of $2,076 million. This 32%
increase in revenue reflects 18% volume growth and an increase in revenue per
TEU across many of our terminals in our consolidated portfolio. In addition,
this revenue number benefited from stronger performance of many of our regional
currencies.
In 2007 we reported our share of net profit from joint ventures and associates
as $108 million. Stripping out a profit contribution from businesses that were
sold during the year, this profit is $87 million. This profit is almost 3 times
higher than for the same period last year higher as it benefits not only from an
excellent performance from terminals within this portfolio, but also the
inclusion of profits from P&O Trans Australia (POTA) and a division of P&O
Maritime Services (POMS) which were restructured during the year resulting in
them becoming joint venture operations.
Including joint ventures and associates, EBITDA rose to $1,100 million and
EBITDA margins to 40% against 34% for 2006. These higher margins are a result
of integration synergies, higher capacity utilisation, up to 85% for
consolidated terminals, improved revenue per TEU and the greater than expected
contribution from our share of profits from associates and joint ventures.
Like for like operating expenses increased 17% to $1,637 million over the year,
lower than the comparable revenue growth rate reflecting that 40% of our costs
are fixed and not linked to revenue growth. A key contributor to the increased
costs in 2007 was the increase in revenue linked to concession fees from
terminals which reported strong revenue growth during the period.
Review of Regional Trading for continuing operations
For financial purposes we report across three regions.
Europe, Middle East and Africa
2006 pro forma 2007
Consolidated Throughput (TEU) 12.5 million 14.7 million
Revenue $1,133 million $1,473 million
Profit from JV and Associates n/a $17 million
EBITDA inc JV and Associates n/a $672 million
Profit from continuing operations n/a $505 million
As of 31 December 2007, we had 17 terminals in the region, of which nine were
consolidated for financial reporting purposes. On average, terminals that
contributed to revenue for the region experienced an increase in volume of 18%
over the same period the previous year.
Revenue from continuing operations for the Middle East, Europe and Africa region
for the year to 31 December 2007 was $1,473 million as compared with $1,133
million for the year ended 31 December 2006, an increase of 30%. This greater
revenue growth than volume growth was as a result of revenue per TEU increases
in terminals such as Jebel Ali (UAE), Constanta (Romania) and Southampton (UK),
all three of which also increased capacity and volumes during the year and the
inclusion of our port in Jeddah (KSA) who contributed to consolidated revenues
in the second half of the year.
EBITDA and EBITDA margins increased to $672 million and 46% respectively
predominately due to improved capacity utilisation of 86% as well as
contribution from higher margin earnings at Constanta, Jebel Ali and Maputo
(Mozambique). 2007 profit from continuing operations increased to $505
million.
The UAE region continued to increase volumes in excess of 20%, with Jebel Ali
increasing volumes by 28% as the port attracted new vessel calls following the
addition of two million TEU capacity in the second half of the year.
Looking ahead, the UAE region will continue to roll out the second phase of new
capacity at Jebel Ali, totalling three million TEU, during 2008. As announced
in early 2008, all general cargo calling at Port Rashid has now moved to Jebel
Ali and it is expected that all container traffic will gradually move to Jebel
Ali during the course of the year. With the expectation that growth rates at
Jebel Ali will continue in line with the aggressive growth we have historically
seen, this may result in the need to bring forward our plans for rolling out the
next phase of expansion at Jebel Ali to ensure we are ready to meet the expected
customer demand in the future.
In Europe, our terminals performed ahead of last year with Constanta and
Southampton performing exceptionally well, reporting volume growth in excess of
25%. The region benefited from improvements in revenue per TEU and improved
utilisation. During the year DP World Antwerp Gateway began piloting an
automated stacking crane (ASC) system which should result in lower costs and
improved productivity at the terminal.
The northern European region continues to remain capacity constrained so we were
delighted to win approvals to build new terminals at London Gateway and
Rotterdam, which will help to ease congestion in this region. In addition, with
the expansion of our customers' business in Russia and Eastern Europe we opened
a representative office in Moscow, Russia which is focused on looking at
opportunities for expanding our operations in the region.
We operated two consolidated ports in the Middle East and Africa region during
the year Maputo and, as mentioned above, Jeddah. Both ports showed solid growth
during the year. During the year we invested in Maputo Port Development
Company, of which our MIPS Container Terminal is a part, reflecting our
commitment to Mozambique over the long term.
Our Africa portfolio was expanded during the year with the award of a concession
in Dakar (Senegal) to operate the current Dakar container terminal, Terminal a
Conteneur, from 2008 for and develop a brand new container terminal at Port du
Futur. The first phase of this development will be completed by 2010.
Our newly acquired port of Sokhna (Egypt) joins the Middle East portfolio as we
expand around the Red Sea. Sokhna is the key port in Egypt for handling cargo
on the Asia Europe trade route, and is well connected to regional transport and
infrastructure.
$675 million of our capital expenditure (capex) was spent in this region during
the year, predominately focussing on the expansion of Jebel Ali, of which phase
one was rolled out in 2007 and phase two will be rolled out in 2008, adding a
total of five million TEU.
Americas, Australia and New Zealand
2006 PF 2007
Consolidated Throughput (TEU) 3.4 million 3.8 million
Revenue $537 million $797 million
Profit from JV and Associates n/a $15 million
EBITDA inc JV and Associates n/a $183 million
Profit from continuing operations n/a $184 million
As of 31 December 2007, we had nine terminals in the region, of which seven were
consolidated for financial reporting purposes. In addition, P&O Maritime reports
through the region. On average, terminals that contributed to revenue
experienced an increase in revenue generating volume for 2007 of 11% compared
with the previous year.
Revenue from continuing operations for the America and Australia region for the
year to 31 December 2007 was $797 million as compared with $537 million for the
year ended 31 December 2006, an increase of 48%.
EBITDA and EBITDA margins increased to $183 million and 23% respectively as
capacity utilisation improved to 87% and synergies following the P&O acquisition
came through. 2007 profit from continuing operations increased to $184 million.
Following the increase in our ownership of Adelaide to 100% early in 2008, we
are in discussions with the port authority and are confident of agreeing a
successful extension of the concession, ensuring continued investment into the
port operations to increase much needed capacity to meet the growth of trade in
Australia.
In the Americas region we saw strong growth from our consolidated terminals,
with throughput growth of 22% led by Vancouver (Canada), which significantly
increased capacity, attracted new customers and increased market share.
Capex across this region was $107m focused on increasing capacity at Vancouver,
Canada and at Brisbane and Melbourne, Australia.
Asia Pacific, Indian Subcontinent
2006PF 2007
Consolidated Throughput (TEU) 4.7 million 5.6 million
Revenue $392 million $461 million
Profit from JV and Associates n/a $72 million
EBITDA inc JV and Associates n/a $292 million
Profit from continuing operations n/a $225 million
As of 31 December 2007, we had 16 operating terminals in the region, of which
seven were consolidated for financial reporting purposes. On average, terminals
that contributed to revenue from continuing operations for the region as of 31
December 2007 experienced an increase in revenue generating volume for 2007 of
18% compared with the previous year.
Revenue from continuing operations for the Asia Pacific and Indian Subcontinent
region for the year to 31 December 2007 was $461 million as compared with $392
million for the year ended 31 December 2006, an increase of 18% against a volume
increase of 19%.
EBITDA and EBITDA margins increased to $292 million and 63% respectively
predominately as almost all the ports reported improved capacity utilisation
with regional utilisation increasing to 93% In addition, regional EBITDA
benefited from a greater contribution from higher margin earnings in Karachi
(Pakistan) and Mundra (India) and from the improved contribution from JV and
Associates. 2007 profit from continuing operations increased to $225 million.
India continues to be one of the fastest growing markets for container traffic,
last year growing at around 20%. DP World was well positioned to take advantage
of the market growth, increasing consolidated volumes to 19%. DP World Chennai
and DP World Nhava Sheva, both reported volumes in excess of 1 million TEU, with
Nhava Sheva achieving the highest throughput by a container terminal in India as
crane moves per hour and berth productivity both increased during the year.
In addition, customers at Mundra have benefited from the introduction of
Container Rail Road Services (CRRS) rolling stock. Quicker and seamless
transportation of containers from the industrial inland hubs in the northern
region to the port of Mundra has helped Mundra to attract additional volumes
which previously moved to other ports on the west coast. An efficient operation
with good connectivity is making Mundra a logical choice with our customers.
The majority of our terminals in the Asia Pacific region are reported under
joint ventures and associates, however those ports that are consolidated grew
volumes 14.5%. ATI, in Manila had an excellent year of increased volumes and
towards the end of the year we were delighted to extend the concession agreement
for the terminal until 2038.
Capex in this region was $94 million, reflecting investment in the port in
Manila following the renewed concession agreement, and at Ho Chi Minh (Vietnam),
the terminal under development.
Joint Ventures and Associates
Of our 42 terminals in operation during 2007, 17 were not consolidated and their
contribution is recognised as net profit from joint ventures and associates.
The majority of these terminals are in the Asia Pacific region, with Qingdao
(China) contributing significantly.
The underlying increase in share of profit of associates and joint ventures was
principally due to better than expected performance in the Asia Pacific and
Indian Sub Continent region, led by volume growth in Qingdao, China of over 20%.
In addition, improved utilisation rates from ports in Europe and the Americas
and volume creation as a result of attracting new services added to the growth
of this portfolio.
Capex
During 2007 we spent $879 million, which, although lower than expectations, will
not change our total capex plans between 2007 and 2010. Our capex spend during
the year was predominately focused on the Middle East, Europe and African region
(75%) and on expansion capex (75%) which is focused on expansion projects within
our existing terminals.
Separately Disclosable Items
During 2007, we moved to become a pure ports operator, transferring or divesting
operations that did not meet our strategy. The company made a profit of $683
million on the sale of our assets in North America, Shekou and Colombo as well
as from the transfer of the P&O Estates and P&O Ferries businesses. In
addition, the company booked a net profit of $65m from the closure of interest
rate swaps and amortization relating to the refinancing of our acquisition debt
during the year. Including separately disclosable items, the company made a
profit of $1,150 million.
Balance Sheet
Comparatives
Following the restructuring of the Company, the balance sheet reflected $1.00 as
cash and share capital. The balance sheet for the six months to 30 June 2007
provides a more meaningful comparison. The major changes in the second half,
include restructuring group debt, raising long term finance to replace the
acquisition finance on the balance sheet and the initial public offering on 26
November 2007, are described below.
Bonds
On 2 July 2007, the Group issued a 10 year Islamic Bond (Sukuk) for the value of
$1.5 billion and 30 year Conventional Bond (Medium Term Note), value $1.75
billion, listed on the DIFX and the London Stock Exchange (LSE). Ahead of these
debt issues, the company received a credit rating of A1/A+ from Moody's and
Standard & Poor's respectively.
Credit Facility
In October 2007, DP World obtained a revolver syndicate credit facility of $3.0
billion, of which $1.324 billion had been drawn on 31 December.
Share Capital
On 1 January 2007, the authorised share capital of the Company was 100 shares of
$1 each. On 20 November 2007, these 100 shares of $1 each were split into 1,000
shares of $0.10 each. Further, on the same day, the authorised share capital of
the Company was increased to 25,000,000,000 shares of $0.10 each. On 26
November 2007 16,600,000,000 ordinary shares of $0.10 each were issued, of which
3,245,300,000 were sold to institutional and retail investors via a listing on
the Dubai International Foreign Exchange (DIFX).
Net Finance Costs
Finance income during the year was $259 million, an increase of $159 million
over the same period in 2006, reflecting the increased cash on our balance sheet
from the transfer and divestment of assets during the year. Finance costs
increased by $180 million to $524 million predominately reflecting the costs
associated with the $3.25 billion long-term debt. Net interest expense was $265
million reflecting interest cover(8) for the year of 4 times.
Net Debt
Net debt as at 31 December 2007 was $2,843 million following a restructuring of
our balance sheet with the issuance of the bond and sukuk on 2 July 2007, which
were predominately used to pay off the outstanding term loan, and the lower than
expected capital expenditure during the year. Our net debt to EBITDA at the end
of the year was 2.6, reflecting the high levels of cash on the balance sheet.
Income tax
Income tax for the twelve months ended 31 December 2007 was $88.9 million charge
as compared with $88.6 million credit for the prior year. Our pro forma
effective tax rate is 12% across our business units.
Pensions
DP World is the sponsoring employer to the £1.2billion P&O Pension Scheme. The
Scheme was closed to new entrants on 31 December 2001 but, as at 1 January 2007,
it still provided benefits for over 21,000 members, the majority of whom had
left the Group some time ago.
During 2007, the Company worked with the Trustee to deliver a number of risk
management measures, which were designed to secure members' rights and options,
while also limiting the long term financial risks of the Company. These measures
involved three separate projects.
Firstly, incentivised transfers out of the Scheme for deferred members who had a
statutory right to transfer their benefits. Almost 3,000 deferred members chose
to transfer out and well over £100 million of pension risk was removed from the
corporate balance sheet.
Secondly, £800 million of Scheme assets were transferred by the Trustee to a UK
regulated specialist annuity provider, in exchange for a bulk annuity policy,
which is now an asset of the Pension Scheme. This policy has enhanced the
protection of members and provides a mechanism for the company to match its
liability risks with a corresponding asset.
Thirdly, the P&O Ferries Division was separated from the DP World ports business
in March 2007 and therefore the inherent pensions cross subsidy between the DP
World ports business and the Ferries Division will no longer exist.
Mohammed Sharaf Yuvraj Narayan
Chief Executive Officer Chief Financial Officer
DP World Limited and its subsidiaries
Consolidated income statement
for the year ended 31 December 2007
Pro forma for the year ended 31
December 2006 (UNAUDITED). This does
not form part of the audited financial
statements
Note Year ended 31 December 2007 (as disclosed in the Company's
Prospectus dated 21 November 2007)
Separately
Before disclosable Before Separately
separately items separately disclosable
disclosable (Note 11) Total disclosable items Total
items items
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
Continuing operations
Revenue from operations 6 2,731,440 - 2,731,440 2,075,956 - 2,075,956
Cost of sales (1,838,006) (45,267) (1,883,273) (1,382,144) (29,631) (1,411,775)
----------- ----------- ------------- ------------ ---------- ------------
Gross profit 893,434 (45,267) 848,167 693,812 (29,631) 664,181
General and administration (251,419) (43,456) (294,875) (315,926) (122,748) (438,674)
expenses
Other income 23,896 3,000 26,896 25,100 17,200 42,300
Finance income 259,127 98,125 357,252 100,513 - 100,513
Finance costs (524,315) (35,201) (559,516) (344,279) (61,146) (405,425)
Share of profit of equity 17 107,821 (3,000) 104,821 28,397 - 28,397
accounted associates and joint
ventures
Profit on sale of termination 11 - 136,640 136,640 - - -
of business
----------- ----------- ------------- ------------ ---------- ------------
Profit before tax from 508,544 110,841 619,385 187,617 (196,325) (8,708)
continuing operations
Income tax (88,853) 8,000 (80,853) 88,632 8,300 96,932
----------- ----------- ------------- ------------ ---------- ------------
Profit after tax from 419,691 118,841 538,532 276,249 (188,025) 88,224
continuing operations
Discontinued operations:
Profit after tax from 7 65,000 546,378 611,378 - - -
discontinued operations
----------- ----------- ------------- ------------ ---------- ------------
Profit for the year 8 484,691 665,219 1,149,910 276,249 (188,025) 88,224
====== ====== ======= ====== ====== =====
Attributable to:
Equity holders of the Company 439,830 665,219 1,105,049 247,616 (188,025) 59,591
Minority interest 44,861 - 44,861 28,633 - 28,633
----------- ----------- ------------- ------------ ---------- ------------
484,691 665,219 1,149,910 276,249 (188,025) 88,224
====== ====== ======= ====== ====== =====
Earnings per share
Basic earnings per share 27 8.95
- US cents
Consolidated statement of recognised income and expense
for the year ended 31 December 2007
2007
USD'000
Income and expense recognised directly in equity
Foreign exchange translation differences 521,084
Foreign exchange recycled to income statement on disposal of 38,100
businesses
Effective portion of net changes in fair value of cash flow hedge (25,500)
Net actuarial loss on pension schemes (46,400)
Transfer to income statement on termination of cash flow hedges 6,357
Tax on items taken directly to equity (2,300)
-----------
Income and expense recognised directly in equity 491,341
Profit for the year 1,149,910
------------
Total recognised income and expense for the year 1,641,251
=======
Attributable to:
Equity holders of the Company 1,582,945
Minority interest 58,306
--------------
1,641,251
========
A significant portion of foreign exchange translation differences arise from
translating goodwill and purchase price adjustments which are carried in foreign
currencies at the Group level. Furthermore, the translation differences arising
on account of translation to the presentation currency for the group
consolidation are also reflected here.
The Company was incorporated on 9 August 2006 and commenced its business
operations on 1 January 2007. No comparatives have therefore been presented in
these consolidated financial statements.
Consolidated balance sheet
as at 31 December 2007
Note 2007
USD'000
Assets
Property, plant and equipment 3,915,029
Goodwill 2,510,397
Other intangible assets 3,507,628
Investment in associates and joint ventures 17 3,322,304
Deferred tax assets 23,489
Other investments 18 41,700
Accounts receivable and prepayments 32,269
--------------
Total non-current assets 13,352,816
--------------
Current assets
Inventories 54,134
Accounts receivable and prepayments 704,468
Bank balances and cash 21 3,058,863
Assets held for sale 22 19,926
------------
Total current assets 3,837,391
-------------
Total assets 17,190,207
========
Equity
Share capital 1,660,000
Share premium 2,472,655
Shareholders' reserve 2,000,000
Retained earnings 1,105,049
Hedging reserve (19,143)
Actuarial reserve (46,400)
Translation reserve 543,439
------------
Total equity attributable to equity holders of the 7,715,600
Company
Minority interest 657,175
------------
Total equity 8,372,775
-------------
Liabilities
Employees' end of service benefits 36,912
Pension and post-employment benefits 110,400
Interest bearing loans and borrowings 5,607,776
Deferred tax liabilities 991,290
Provisions 34,100
Accounts payable and accruals 270,272
------------
Total non-current liabilities 7,050,750
------------
Accounts payable and accruals 919,355
Bank overdrafts 182,866
Interest bearing loans and borrowings 111,313
Income tax liabilities 468,248
Pension and post-employment benefits 41,500
Provisions 43,400
-------------
Total current liabilities 1,766,682
-------------
Total liabilities 8,817,432
-------------
Total equity and liabilities 17,190,207
========
Consolidated statement of cash flows
for the year ended 31 December 2007
2007
Note USD'000
Cash flows from operating activities
Profit from continuing operations 538,532
Profit from discontinued operations 611,378
------------
1,149,910
Adjustments for:
Depreciation and amortization 8 371,368
Share of profit of joint ventures and associates 17 (104,821)
Finance costs 9 559,516
Income tax expenses 84,254
Profit on sale of property, plant and equipment (1,416)
Gain on sale of discontinued operations, net of tax 7 (544,778)
Gain on sale of continuing operations, net of tax (136,640)
Finance income 9 (357,252)
------------
1,020,141
Change in inventories (10,015)
Change in receivables (104,949)
Change in payables 213,505
Change in property held for sale 37,547
Change in provisions, pensions, post-employment benefits and deferred tax (64,835)
-------------
Cash from operations 1,091,394
Taxes paid (136,302)
-----------
Net cash from operating activities 955,092
-----------
Cash flows from investing activities
Purchase of property, plant and equipment (741,684)
Proceeds from disposal of property, plant and equipment 86,540
Proceeds from disposal of discontinued operations 2,089,042
Proceeds from disposal of continuing operations 439,486
Additions to port concessions (35,200)
Other investment (26,500)
Interest received 357,252
Dividends received from joint ventures and associates 65,706
Additional investment in joint ventures and associates (101,907)
Cash inflow on acquisition of entities under common control 2,221,085
-------------
Net cash from investing activities 4,353,820
-------------
Consolidated statement of cash flows (continued)
for the year ended 31 December 2007
Cash flows from financing activities
Repayment of loan (4,943,262)
Proceeds from issue of bonds 3,250,000
Transaction cost on bond issue and revolving syndicate loan facility (43,364)
Drawdown of loan 1,766,949
Payment to shareholder (2,000,000)
Interest paid (452,141)
Dividends paid to minority interest (11,097)
------------
Net cash used in financing activities (2,432,915)
------------
Net increase in cash and cash equivalents 2,875,997
-------------
Cash and cash equivalents at 1 January -
-------------
Cash and cash equivalents at 31 December 21 2,875,997
=======
* Cash and cash equivalents at the beginning of the year, represents net cash
inflow from financing activities of USD 1.
Notes to the accounts
A full set of notes will be published with the annual report due to be published
at the end of April 2008
6 Segment information
The following table presents certain results, assets and liabilities information
regarding the Group's geographical segments as at 31 December 2007.
Asia Pacific Australia, Middle East,
and Indian New Zealand Europe and Head 2007
subcontinent and Americas Africa office Total
USD'000 USD'000 USD'000 USD'000 USD'000
Revenue 460,993 858,196 1,941,551 - 3,260,740
Less: revenue from discontinued operations - (61,200) (468,100) - (529,300)
---------- ----------- ------------ --- ------------
Revenue from continuing operations 460,993 796,996 1,473,451 - 2,731,440
====== ====== ======= == =======
Segment results from operations (before finance costs)* 225,316 376,573 920,601 (170,316) 1,352,174
Less: segment results from discontinued operations** - (192,751) (415,927) (2,700) (611,378)
----------- ---------- ---------- ---------- -----------
Segment results from continuing operations 225,316 183,822 504,674 (173,016) 740,796
(before finance costs) ====== ====== ====== ====== ======
Net finance cost - - - (202,264) (202,264)
== == == ====== ======
Profit for the year 225,316 376,573 920,601 (372,580) 1,149,910
Profit from discontinued operations - (192,751) (415,927) (2,700) (611,378)
---------- ---------- ---------- ---------- ----------
Profit/(loss) from continuing operations 225,316 183,822 504,674 (375,280) 538,532
====== ====== ====== ====== ======
*Segment results from operations (before finance cost) comprise profit for the
year plus net finance cost.
** Refer to note 7 on discontinued operations.
Net finance cost and tax expense has not been allocated to various geographical
locations and are instead reported in head office.
6 Segment information (continued)
Asia Pacific Australia, Middle East,
and Indian New Zealand Europe and Head 2007
subcontinent and Americas Africa office Total
USD'000 USD'000 USD'000 USD'000 USD'000
Segment assets 5,340,369 2,868,393 6,833,308 2,148,137 17,190,207
======= ======= ======= ======= ========
Segment liabilities 357,672 200,524 668,066 6,131,632 7,357,894
Tax liabilities - - - 1,459,538 1,459,538
---------- ---------- ---------- ------------ ------------
Total liabilities 357,672 200,524 668,066 7,591,170 8,817,432
====== ====== ====== ======= =======
Capital expenditure 94,211 106,615 675,573 2,272 878,671
===== ====== ====== ==== ======
Depreciation 88,521 20,971 169,398 1,286 280,176
===== ===== ====== ==== ======
Amortisation/impairment 33,031 42,245 15,916 - 91,192
===== ===== ===== == =====
Share of profit of associates and joint ventures 72,205 15,465 17,151 - 104,821
===== ===== ===== == =====
Tax expense - - - 80,853 80,853
===== ===== ===== ===== =====
Tax liabilities have not been allocated to various geographical locations and
are reported in head office.
6 Segment information (continued)
Earnings before interest, tax, depreciation and amortisation ("EBITDA") -
Adjusted
Asia Pacific Australia, Middle East,
and Indian New Zealand Europe and Head 2007
subcontinent and Americas Africa office Total
USD'000 USD'000 USD'000 USD'000 USD'000
Profit from continuing operations 225,316 183,822 504,674 (375,280) 538,532
Less: separately disclosable items (55,040) (64,188) 27,267 (26,880) (118,841)
---------- --------- --------- --------- ---------
Adjusted net profit 170,276 119,634 531,941 (402,160) 419,691
Interest income - - - (259,127)(259,127)
Interest expense - - - 524,315 524,315
Tax expense - - - 88,853 88,853
Depreciation and amortisation 121,552 63,216 140,047 1,286 326,101
---------- ---------- ---------- --------- --------
EBITDA (Adjusted) 291,828 182,850 671,988 (46,833)1,099,833
====== ====== ====== ===== =======
7 Discontinued operations
A discontinued operation is an entity that has been disposed of and represents a
major line of business or geographical area of operations.
(a) P&O Ports North America
P&O Ports North America ("POPNA") was classified as a discontinued operation
held for sale at the time of acquisition of P&O by DPA. Pursuant thereto, on 10
December 2006, the Group entered into an agreement to sell 100% of POPNA.
On 16 March 2007, POPNA was sold to American International Group ("AIG").
(b) P&O Estates
P&O Estates was part of the Property business segment within the UK and
Continental Europe operations. On 11 May 2007, the Group entered into an
agreement to transfer its property development business in Europe and China (P&O
Estates) to Istithmar World, an affiliate of the Group. The actual transfer was
effected on 24 December 2007.
(c) P&O Ferries
On 30 March 2007, the Group transferred its entire Ferries division to Dubai
Ferries Holding FZE, which is an affiliate of the Group and also a subsidiary of
Ports and Free Zone World FZE.
(d) Summary of profit after tax from discontinued operations:
Before separately Separately 2007
disclosable items disclosable items Total
USD'000 USD'000 USD'000
Total profit for the year from
discontinued operation 65,000 1,600 66,600
Total profit after tax from sale of
discontinued operation - 544,778 544,778
-------- ---------- ----------
65,000 546,378 611,378
====== ===== ======
8 Profit for the year
2007
USD'000
Profit for the year is stated after charging the following costs :
Staff costs 649,994
======
Depreciation and amortization expenses 371,368
======
Operating leases 319,975
======
9 Finance income and expenses
2007
USD'000
Financial income
Interest income 325,617
Exchange gains 13,035
Other net financing income in respect of pension plans 18,600
----------
357,252
----------
Financial expenses
Interest payable (546,316)
Exchange losses (13,200)
----------
(559,516)
----------
Net financing costs (202,264)
======
11 Separately disclosable items
2007
USD'000
Impairment costs and restructuring (59,667)
Profit on sale / termination of business 136,640
Profit on sale of discontinued operations, net of tax 546,378
Net gain / (loss) on pension settlement (13,200)
Income on termination of interest rate swaps 98,125
Finance costs (33,601)
Other separately disclosable items (9,456)
----------
665,219
======
Impairment costs and restructuring mainly includes an impairment of software
costs of USD 37,800 thousand.
Profit on sale / termination of business includes profit on sale of investments
divested during the year including Shekou, Colombo and AGS Australia.
Profit on sale of discontinued operations, net of tax includes profit on sale of
P&O Ports North America ('POPNA'), profit on sale of Ferries and Estates
division.
Income on termination of interest rate swaps relates to two interest rate swaps
that converted the floating rate interest on the syndicated debt to a fixed
rate, which resulted in a profit of USD 98,125 thousand on termination.
16 Impairment testing of goodwill
Goodwill acquired through business combinations has been allocated to various
cash-generating units, which are reportable business units, for the purposes of
impairment testing.
Impairment testing is done at an operating port level that represents individual
cash-generating units ("CGU"). Details of the geographical segments are shown
below:
Cash-generating units aggregated 2007 Discount rate
by geographical segment Carrying amount applied to cash
of goodwill flow projections Perpetuity
USD'000 growth rate
Asia Pacific and Indian subcontinent 292,809 10% - 16% 2.50% - 3.00%
Australia, New Zealand and Americas 908,664 6% - 14% 2.50%
Middle East, Europe and Africa 1,308,924 6% - 13% 2.00% - 2.50%
------------
Total 2,510,397
=======
The recoverable amount of the cash-generating units has been determined based on
their value in use calculated using cash flow projections based on the financial
budgets approved by management covering a three year period and a further
outlook for five years, which is considered appropriate in view of the outlook
for the industry and the long-term nature of the concession agreements held.
In management's view, the perpetuity growth rate is the minimum growth rate
expected to be achieved beyond the eight year period.
17 Investment in associates and joint ventures
Summary financial information for equity accounted investees, not adjusted for
the percentage ownership held by the Group:
Asia Pacific Australia Middle East,
and Indian New Zealand Europe and 2007
subcontinent and Americas Africa Total
USD'000 USD'000 USD'000 USD'000
Current 361,801 214,260 258,496 834,557
assets
Non-current 7,206,870 881,686 2,934,739 11,023,295
assets
------------ ------------ ------------ -------------
Total 7,568,671 1,095,946 3,193,235 11,857,852
assets
======= ======= ======= ========
Current 730,779 164,068 445,956 1,340,803
liabilities
Non-current 1,437,119 294,374 516,789 2,248,282
liabilities
------------ ---------- ---------- ------------
Total 2,167,898 458,442 962,745 3,589,085
liabilities
======= ====== ====== =======
Revenues 847,215 270,827 625,300 1,743,342
Expenses (635,046) (215,262) (597,768) (1,448,076)
---------- --------- ---------- ------------
Net profit 212,169 55,565 27,532 295,266
====== ===== ===== =======
The Group's share of profit of equity accounted associates and joint ventures 104,821
======
The Group's share of net assets of equity accounted associates and joint ventures 3,322,304
========
18 Other investments
2007
USD'000
Non-current investments
Debt securities held to maturity 12,100
Available-for-sale financial assets 29,600
--------
41,700
=====
Debt securities held to maturity carry an effective interest rate of 5.35%.
Available-for-sale financial assets comprise unquoted investment in an
Infrastructure Fund.
21 Bank balances and cash
2007
USD'000
Cash at banks and in hand 2,016,239
Short-term deposits 493,444
Deposits under lien 549,180
-------------
Bank balances and cash 3,058,863
Bank overdrafts (182,866)
------------
Cash and cash equivalents 2,875,997
=======
Short-term deposits are made for varying periods of between one day and three
months depending on the immediate cash requirements of the Group and earn
interest at the respective short-term deposit market rates.
Out of the deposits under lien, USD 368,000 thousand arose from amounts drawn
down under the Group's syndicated term loan facility and placed on deposit to
collaterise some of the regional borrowings. A further amount of USD 96,440
thousand is providing collateral for the borrowings and issue of a guarantee for
a subsidiary.
The balance of USD 84,740 thousand is under lien in respect of certain loan
notes issued to the erstwhile shareholders of Peninsular & Oriental Steam
Navigation Company Limited ("P&O").
22 Asset held for sale
Assets held for sale at 31 December 2007 comprises of the following:
(a) Shanghai Jifa
As at 31 December 2007, the Group's share of net assets of Shanghai Jifa are
classified as held for sale and the details are as below:
2007
USD'000
Assets
Non-current assets
Investments in joint ventures and associates (A) 9,226
=====
On 20 August 2007, DP World entered into Share Transfer Agreement with SIPG
Logistic Co Ltd ("SIPGL") to dispose of DP World Asia Ltd's existing 21.9885%
shareholding in Shanghai JiFa Logistics Co Ltd ("JiFa").
22 Asset held for sale (continued)
(b) P&O Estates
On 11 May 2007, the Group entered into an agreement to transfer its property
development business in Europe and China (P&O Estates) to Istithmar, an
affiliate of the Group. The transfer of all assets were effected on 24 December
2007, except for the following which is classified as held for sale at 31
December 2007.
2007
USD'000
Assets
Non-current assets
Investment in joint ventures and associates (B) 10,700
--------
Total assets held for sale (A + B) 19,926
=====
27 Earnings per share
Basic earnings per share calculated in accordance with IAS 33
The calculation of basic earnings per share at 31 December 2007 is based on the
profit attributable to ordinary shareholders of USD 1,105,049 thousand and the
weighted average number of ordinary shares outstanding of 12,348,308 thousand.
The weighted average number of ordinary shares outstanding reflects the bonus
issue of shares during the year.
Total
2007
USD'000
Profit attributable to ordinary shareholders 1,105,049
=======
Weighted average number of ordinary shares outstanding
at 31 December 2007 12,348,307,692
===========
27 Earnings per share (continued)
Basic earnings per share calculated in accordance with IAS 33 (continued)
Total
Basic earnings per share - (US cents) 8.95
===
The Company has no share options outstanding at the year end and therefore the
basic and diluted earnings per share are the same.
Pro forma basic earnings per share - UNAUDITED
The calculation of basic earnings per share at 31 December 2007 is based on the
profit attributable to ordinary shareholders from continuing operations of USD
374,830 thousand and the number of ordinary shares outstanding of 16,600,000
thousand (Refer to note 23 - Share capital). Management has concluded that the
number of ordinary shares outstanding at the year end (16,600,000,000 shares) is
more appropriate rather than the weighted average number of ordinary shares as
required under IAS 33, as it will be more comparable with future years'
performance.
2007
USD'000
Profit attributable to ordinary shareholders 439,830
Less: profit after tax from discontinued operations (65,000)
----------
Profit attributable to ordinary shareholders - continuing operations 374,830
======
Number of ordinary shares outstanding at 31 December 2007 16,600,000,000
===========
Basic earnings per share - continuing operations - (US cents) 2.26
===
- END -
--------------------------
(1) All financial results are reported before separately disclosable items
unless otherwise stated and all comparisons to 2006 refer to pro forma numbers
(2) Earnings before interest, tax, depreciation and amortisation, including
share of profit from joint ventures and associates see note 6 for further
information
(3) See note 27
(4) Drewry Shipping Consultants' provisional data for 2007
(5) As at 17 February 2008
(6) Drewry Shipping Consultants, provisional number for 2007
(7) See section on joint ventures and associates later on in document
(8) Interest cover is calculated using EBITDA and net interest expense
This information is provided by RNS
The company news service from the London Stock Exchange
END
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