DP World profits plunge 59% in H1 on Red Sea crisis | Economy

Dubai Ports’ profits plunged 59% in the first half of this year amid shipping disruptions caused by the current crisis in the Red Sea, amid the increasing repercussions of Israel’s war on the Gaza Strip, which has been ongoing since October 7, 2023.

Company profit

Attacks by Yemen’s Houthi group with missiles and drones in the Red Sea have forced many shipping companies to reroute ships away from the Suez Canal and sail around the Cape of Good Hope at the southern tip of Africa.

The Houthi attacks are a development of the repercussions of the Israeli war on the Gaza Strip, as they target ships heading there.

Dubai-based DP World said in a regulatory filing that profit attributable to owners of the company was $265 million in the six months to June 30, down from $651 million a year earlier.

The company’s revenues increased 3.3% to $9.34 billion, driven by the performance of the logistics, ports and terminals divisions.

Red Sea Attacks

DP World said attacks on shipping in the Red Sea and the rerouting of ships were severely disrupting supply chains, noting that its operations in the Middle East, Africa and Europe were “partially affected”.

It stated that it recorded capital expenditures worth $994 million in the first half of this year, divided into $593 million for ports and container terminals, $278 million for logistics services, complexes and economic zones, $122 million for marine services, and $1 million for headquarters operations.

She added that the disruptions caused by the crisis affected adjusted core earnings, which fell 4.3% to $2.497 billion, but she said she expected better performance in the second half of the year.