DP WORLD ANNOUNCES SOLID FINANCIAL RESULTS Like-for-like Earnings grow 15.8% in First Half of Dubai, United Arab Emirates, 24 August,. Global trade enabler DP World today announces solid financial results for the six months to. On a reported basis, revenue grew 9.6% and adjusted EBITDA increased by 4.2%. Adjusted EBITDA margin was 53.4%, delivering profit attributable to owners of the Company, before separately disclosed items 1, of $606 million and EPS of 73.0 US cents. On a like-for-like basis, revenue grew 3.0% and adjusted EBITDA increased by 7.0%, adjusted EBITDA margin of 54.8%, attributable earnings up by 15.8%, reflecting the improved trading environment. Results before separately disclosed items 1 unless otherwise stated 1H 1H As reported % change Like-for- like at constant currency % change 2 USD million Gross throughput 3 (TEU 000) 33,997 31,414 8.2% 7.7% Consolidated throughput 4 (TEU 000) 17,870 14,603 22.4% 4.7% Revenue 2,295 2,094 9.6% 3.0% Share of profit from equity-accounted investees 60 69 (12.7%) 67.3% Adjusted EBITDA 5 1,225 1,176 4.2% 7.0% Adjusted EBITDA margin 6 53.4% 56.2% - 54.8% 7 Profit for the period 682 673 1.4% 13.3% Profit for the period attributable to owners of the 606 608 (0.3%) 15.8% Company Profit for the period attributable to owners of the 543 557 (2.5%) - Company after separately disclosed items Basic earnings per share attributable to owners of the Company (US cents) 73.0 73.2 (0.3%) 15.8% Basic earnings per share attributable to owners of the Company after separately disclosed items (US cents) 65.5 67.1 (2.5%) - Results Highlights Revenue of $2,295 million (Revenue growth of 9.6% on reported and 3.0% on likefor-like basis) Revenue growth of 9.6% supported by the strong volume growth across all three DP World regions. Like-for-like revenue increased by 3.0% driven by a 4.2% increase in total containerized revenue. 1 Before separately disclosed items (BSDI) primarily excludes non-recurring items. DP World reported a loss in separately disclosed items of $63 million. 2 Like-for-like at constant currency is without the addition of new capacity at Berbera (Somaliland), Limassol (Cyprus), Saint John (Canada), ISS (Pakistan), CXP (Peru), Yarimca (Turkey) and normalizes for PNC (South Korea) consolidation. 3 Gross throughput is throughput from all consolidated terminals plus equity-accounted investees. 4 Consolidated throughput is throughput from all terminals where the group has control as per IFRS. 5 Adjusted EBITDA is Earnings before Interest, Tax, Depreciation & Amortisation including share of profit from equity-accounted investees before separately disclosed items. 6 The adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue, including our share of profit from equity-accounted investees. 7 Like-for-like adjusted EBITDA margin.
Adjusted EBITDA of $1,225 million and adjusted EBITDA margin of 53.4% (Like-forlike adjusted EBITDA margin at 54.8%) Adjusted EBITDA grew 4.2% and EBITDA margin for the half year reached 53.4%. Like-for-like adjusted EBITDA increased at a stronger pace of 7.0% resulting in a margin of 54.8%. Profit for the period attributable to owners of the Company of $606 million Strong adjusted EBITDA growth resulted in a 15.8% increase in profit attributable to owners of the Company before separately disclosed items on a like-for-like basis but on a reported basis earnings remained flat (-0.3%). Strong cash generation and robust balance sheet and credit rating upgrade Cash from operating activities amounted to $1,009 million up from $905 million in 1H. Leverage (Net debt to annualised adjusted EBITDA) decreased to 2.6 times (from 2.8 times at 31 December ). DP World was recently upgraded by Fitch Ratings to BBB+ from BBB with stable outlook, after both Fitch and Moody s upgraded the rating by one notch last year. Continued investment in high quality long-term assets with strong supply/demand dynamics Capital expenditure of $595 million invested across the portfolio during the first half of the year. Capital expenditure guidance for remains unchanged at $1.2 billion with investments planned into Jebel Ali (UAE), London Gateway (UK), Prince Rupert (Canada) and Berbera (Somaliland). DP World subsidiary, P&O Maritime, acquired Spanish Maritime Service operator Reyser to further develop the Group s maritime offering as well as adding complementary or related services to further diversify and strengthen our business. Rebound in global trade and market share gains Improved trading environment in first half of and market share gains from the new shipping alliances driving volumes in the second quarter of the year. Robust performance across all three regions. Well placed to meet full year market expectations.
DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented: DP World is pleased to announce a solid set of first half results with attributable earnings of $606 million, and like-for-like earnings growth of 15.8%. Adjusted EBITDA reached $1,225 million as margins were maintained at above 50%. Encouragingly, after a challenging period, we have seen a pick-up in global trade particularly in the second quarter of the year, and that combined with the ramp up in our recent investments in Yarimca (Turkey), London Gateway (UK), Rotterdam (Netherlands) and JNP Mumbai (India), has delivered ahead-of-market volume growth. In the first half of, we have invested $595 million of capex in key growth markets, and announced over $170 million of acquisitions in our maritime business, which offers significant growth opportunities. These investments leave us well placed to deliver on our strategy to strengthen our port related services and capitalize on the significant medium to long-term growth potential of this industry. Our balance sheet remains strong and we continue to generate high levels of cashflow, which gives us the ability to invest in the future growth of our current portfolio, and the flexibility to make new investments should the right opportunities arise as well as delivering enhanced returns to shareholders over the medium term. Looking ahead to the second half of the year, we expect higher levels of throughput to be maintained. Overall, the steady financial performance of the first six months leaves us confident in meeting full-year market expectations. - END - Investor Enquiries Redwan Ahmed DP World Limited Mobile: +971 50 5541557 Direct: +971 480 80842 Redwan.Ahmed@dpworld.com Lie-Tin Wu DP World Limited Mobile : +971 50 4220405 Direct : +971 480 80929 Lie-Tin.Wu@dpworld.com
24 th August 12pm UAE, 9am UK Conference Call 1) Conference call for analysts and investors hosted by Redwan Ahmed. 2) A playback of the call will be available after the conference call concludes. For the dial in details and playback details please contact investor.relations@dpworld.com. The presentation accompanying the conference call will be available on DP World s website within the investor centre under Financial Results on http://web.dpworld.com/investorcentre/financial-results/ 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 The first half of has witnessed an improvement in global trade and DP World has delivered robust volume growth 8 as our recent strategic investments begin to deliver. The financial performance has remained robust with adjusted EBITDA of $1,225 million and profit attributable to owners of the Company of $606 million, which once again reinforces our view that operating a diversified portfolio with a focus on faster growing markets, and origin and destination cargo, will deliver superior earnings growth and enhance shareholder value. During the first six months, we have seen the consolidation of Pusan (South Korea), further improved contribution from the Jebel Ali Free Zone, and London Gateway signing the game-changing Asia-Europe service with THE alliance. Furthermore, with the formation of the new shipping alliances in April, we have witnessed market share gains accelerating our volumes in the second quarter. These developments have contributed to the growth of our portfolio and we have been able to achieve earnings growth on a like-for-like basis, demonstrating that we have the right strategy and the relevant capacity in the key markets. Within our existing portfolio, $595 million capital expenditure has been invested in the first half of in markets with attractive supply and demand dynamics. In July, we have added 1.5 million TEU of capacity to Terminal 3 at Jebel Ali port (UAE). Our flagship port continues to operate at high levels of utilisation and with the recovery in volumes the mediumterm outlook remains positive, particularly with the lead up to EXPO 2020. Furthermore, with signing the first regular Asia-Europe service we have opened the third berth at London Gateway (UK) port adding 0.8 million TEU of capacity. Other key capacity additions in are at Prince Rupert (Canada) and Berbera (Somaliland). Our balance sheet is strong with relatively low leverage which gives us flexibility to continue to seek growth opportunities in port and other related markets. We aim to continue to add capacity in key growth markets while maintaining the existing shape of our portfolio that has a 70% exposure to origin and destination cargo (O&D) and 75% exposure to faster growing markets. 8 Drewry Maritime Research upgraded full-year container volume growth forecast for the industry to 4.0% in their Annual Review and Forecast published in August.
Group Chief Financial Officer s Review DP World delivered a steady set of financial results in the first half of and continued strong cash generation with profit attributable to owners of the Company at $606 million. Our adjusted EBITDA was $1,225 million, while our adjusted EBITDA margin reached 53.4%. Reported revenue grew by 9.6% to $2,295 million, supported by the strong volume growth across all three DP World regions. It is worth noting that our financials are impacted by the consolidation of Pusan (South Korea), which was previously treated as an equity-accounted investee, while our 1H financials were boosted primarily by favourable currency movements. As always, we provide a like-for-like analysis which is a truer reflection of the underlying business performance. Under a like-for-like basis, first half revenues grew by 3.0% while consolidated volumes grew by 4.7%, resulting in a like-for-like adjusted EBITDA growth of 7.0% with margins of 54.8% and a 15.8% increase in profit attributable to owners of the Company before separately disclosed items. Like-for-like revenue growth was mainly driven by a 4.2% improvement in total containerized revenue, particularly containerized stevedoring revenue, which increased by 5.3% on a like-for-like basis. Total revenue per TEU dropped 1.6% on a like-for-like basis due to a less favourable volume mix. During the first half of, we pre-paid $250 million term loan due in July and the remaining $387 million outstanding of the 6.25% July sukuk was repaid on maturity in July. Furthermore, we received the cash for the partial monetisation of our Canadian assets as part of the CDPQ investment partnership. Overall, our low leverage of 2.6 times provides flexibility to support growth either in our existing business, or new opportunities should they become available at attractive prices. During the first half of, we invested $595 million capex in key markets, including projects in Jebel Ali port (UAE), Jebel Ali Free Zone (UAE), London Gateway (UK) and Prince Rupert (Canada). We have already added 0.8 million TEU to London Gateway and 1.5 million to Terminal 3 at Jebel Ali and expect to deliver new capacity of 0.5 million TEU at Prince Rupert in 2H. Furthermore, we would like to highlight that DP World Credit rating was upgraded by Fitch to BBB+ from BBB. This followed last year s upgrade by both rating agencies, Fitch and Moody s, and to receive consecutive upgrades in the current market conditions is a true recognition of the strength and resilience of our business alongside our long-term growth potential.
Middle East, Europe and Africa Results before separately disclosed items 1H 1H USD million % change Like-forlike at constant currency % change Consolidated throughput (TEU 000) 11,183 10,607 5.4% 4.2% Revenue 1,597 1,542 3.5% 1.5% Share of profit from equity-accounted investees 9 (3) 430.3% 429.5% Adjusted EBITDA 945 869 8.7% 5.8% Adjusted EBITDA margin 59.2% 56.4% - 60.8% 9 Market conditions in the Middle East, Europe and Africa region improved as UAE volumes recovered and London Gateway won the regular Asia-Europe service from THE alliance. Volumes in the UAE were up by 4.3% and the EMEA region grew at 5.4% year-on-year in the first half. Reported revenue in the region grew 3.5% to $1,597 million, aided by the performance of the Jebel Ali Free Zone as noncontainerized revenue grew 6.0%. On a like-for like basis, revenue grew 1.5% as containerized other revenue grew 3.4% and total containerized revenue grew 2.3%. Adjusted EBITDA was $945 million, 8.7% ahead of the same period last year mostly due to improved trading in the UAE and new services at London Gateway, while adjusted EBITDA margin rose to 59.2%. Like-for-like revenue and adjusted EBITDA growth on prior year at constant currency was 1.5% and 5.8% respectively. Like-for-like adjusted EBITDA margins stood at 60.8%. We invested $493 million in the region, mainly focused on capacity expansions in Jebel Ali port (UAE), Jebel Ali Free Zone (UAE) and London Gateway (UK). Asia Pacific and Indian Subcontinent Results before separately disclosed items 1H 1H USD million % change Like-forlike at constant currency % change Consolidated throughput (TEU 000) 5,000 2,531 97.5% 2.9% Revenue 335 221 51.4% 6.5% Share of profit from equity-accounted investees 61 62 (2.0%) 17.6% Adjusted EBITDA 229 163 40.4% 16.1% Adjusted EBITDA margin 68.3% 73.7% - 69.0% Markets conditions in the Asia Pacific and Indian Subcontinent region were generally positive. Volume growth in the region of 97.5% was boosted by the consolidation of Pusan (South Korea) and the likefor-like growth of 2.9% is a better reflection of the performance. Revenue growth of 51.4% to $335 million was again due to the consolidation of Pusan and on a likefor-like basis revenue grew 6.5% ahead of volume growth due to strong containerized other revenue 9 Like-for-like adjusted EBITDA margin.
growth of 8.2% and non-containerized revenue growth of 6.9%. Share of profit from equity-accounted investees stayed broadly flat on a reported basis at $61 million compared to $62 million in 1H but grew 17.6% on a like-for-like basis due to improved contribution from Manila (Philippines) and Qingdao (China). Adjusted EBITDA of $229 million was 40.4% higher than the same period last year on a reported basis and 16.1% on a like-for-like basis while the like-for-like adjusted EBITDA margin stood at 69.0%. Capital expenditure in this region during the year was $30 million, mainly focused on Pusan (South Korea) and JNP Mumbai (India). Australia and Americas Reported results before separately disclosed items USD million 1H 1H % change Like-forlike at constant currency % change Consolidated throughput (TEU 000) 1,687 1,464 15.2% 13.5% Revenue 363 331 9.7% 6.9% Share of profit from equity-accounted investees (10) 10 (202.9%) 40.5% Adjusted EBITDA 140 153 (8.0%) 5.4% Adjusted EBITDA margin 38.7% 46.2% - 40.5% Market conditions have improved and reported volumes grew by 15.2%, benefiting from stronger volumes in the Americas. Revenues grew by 9.7% to $363 million. Profit from equity-accounted investees recorded a loss of $10 million due to unfavourable foreign exchange movements in Brazil, however, on a like-for-like basis, JV income was up by 40.5%. Adjusted EBITDA was $140 million, down 8.0% mainly due to unfavourable foreign exchange movements in Brazil. However, like-for-like revenue growth at constant currency was up 6.9% and like-for-like adjusted EBITDA grew by 5.4%, reflecting a stable performance in the region. We invested $71 million capital expenditure in our terminals across this region during the year mainly focused in Prince Rupert (Canada). Cash Flow and Balance Sheet Cash generation remained strong with cash from operations standing at $1,009 million for 1H. Our capital expenditure reached $595 million across the portfolio as we invested in new capacity in Jebel Ali port (UAE), London Gateway (UK) and Prince Rupert (Canada). Gross debt fell to $7,547 million in 1H compared to $7,618 million at 31 December. Net debt was also lower at $5,916 million compared to $6,319 million at year end as the cash on the balance sheet in 1H of $1,631 million was higher due to the partial monetisation of our Canadian assets as part of the CDPQ investment partnership. Our balance sheet shows that leverage (net debt to annualized adjusted EBITDA) decreased to 2.6 times from 2.8 times at 31 December. Overall, the balance sheet remains strong with ongoing strong cash generation and plenty of headroom and flexibility to add to our portfolio should favourable assets become available at attractive prices.
Capital Expenditure Consolidated capital expenditure in the first half of was $595 million, with maintenance capital expenditure of $77 million. We expect the full year capital expenditure to remain at $1.2 billion and we look forward to adding further capacity to Jebel Ali port (UAE), Prince Rupert (Canada) and Berbera (Somaliland). Net finance costs before separately disclosed items Net finance cost for the six months was higher than the prior period at $166 million (1H: $142 million) mainly due to lower foreign exchange gains. Taxation DP World is not subject to income tax on its UAE operations. 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 the year, DP World s income tax expense before separately disclosed items was $76 million (1H: $91 million). Profit attributable to non-controlling interests (minority interest) Profit attributable to non-controlling interests (minority interest) before separately disclosed items was $76 million, (1H: $65 million) ahead of the comparable period due to a generally stronger performance in Africa, Asia Pacific and the Americas. Separately disclosed items DP World reported a loss in separately disclosed items of $63 million, mainly representing the change in the fair value of the convertible bond option. Earnings per share (EPS) As at, basic EPS after separately disclosed items was 65.5 US cents. Basic EPS before separately disclosed items was 73.0 US cents, representing a 0.3% decline on the prior year. Dividends It is our current dividend policy that not less than 20% of our profit for the year attributable to owners of the Company (after separately disclosed items) will be distributed as dividends. Dividends in respect of the full year will be proposed at the time of the preliminary results in March 2018. Sultan Ahmed Bin Sulayem Group Chairman and Chief Executive Officer Yuvraj Narayan Group Chief Financial Officer
DP World Limited and its subsidiaries Condensed consolidated interim financial statements
DP World Limited and its subsidiaries Condensed consolidated interim financial statements for the six months ended Contents Independent auditors report Condensed consolidated interim financial statements Condensed consolidated statement of profit or loss Condensed consolidated statement of other comprehensive income Condensed consolidated statement of financial position Condensed consolidated statement of changes in equity Condensed consolidated statement of cash flows Notes to condensed consolidated interim financial statements Basis of preparation and accounting policies 1. Corporate information 2. Basis of preparation 3. Significant accounting policies 4. Use of estimates and judgements Performance for the year 5. Segment information 6. Income tax 7. Separately disclosed items 8. Dividend 9. Earnings per share Assets 10. Property, plant and equipment 11. Investment properties 12. Intangible assets and goodwill 13. Investment in equity-accounted investees 14. Cash and cash equivalents Group structure 15. Related party transactions Risk 16. Financial risk management Capital structure 17. Share capital 18. Reserves 19. Interest bearing loans and borrowings Other information 20. Operating leases 21. Capital commitments 22. Contingencies 23. Subsequent events
Independent Auditors report on review of condensed consolidated interim financial statements The Shareholders DP World Limited Introduction We have reviewed the accompanying condensed consolidated statement of financial position of DP World Limited as at, the condensed consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the six month period then ended, and notes to the interim financial information ( the condensed consolidated interim financial information ). Management is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with IAS 34, Interim Financial Reporting. Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review. Scope of review We conducted our review in accordance with the International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. 1
DP World Limited Independent Auditors report Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial information as at is not prepared, in all material respects, in accordance with IAS 34, Interim Financial Reporting. KPMG LLP Rohit Rajvanshi 24 August 2
DP World Limited and its subsidiaries Condensed consolidated statement of profit or loss Note Before separately disclosed items Period ended Period ended Separately disclosed items (Note 7) Separately disclosed items (Note 7) Total Before separately disclosed items Total USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenue 2,294,453 7,933 2,302,386 2,093,783 33,107 2,126,890 Cost of sales (1,120,478) (7,933) (1,128,411) (1,005,636) (33,107) (1,038,743) Gross profit 1,173,975-1,173,975 1,088,147-1,088,147 General and administrative expenses (330,283) - (330,283) (265,764) (6,160) (271,924) Other income 20,278 571 20,849 14,493-14,493 Share of profit/ (loss) from equity-accounted investees (net of 13 60,196 (11,813) 48,383 68,930-68,930 tax) Results from operating activities 924,166 (11,242) 912,924 905,806 (6,160) 899,646 Finance income 52,057-52,057 73,430 59,570 133,000 Finance costs (217,811) (51,535) (269,346) (215,469) (114,368) (329,837) Net finance costs (165,754) (51,535) (217,289) (142,039) (54,798) (196,837) Profit before tax 758,412 (62,777) 695,635 763,767 (60,958) 702,809 Income tax expense 6 (76,128) - (76,128) (90,997) 8,535 (82,462) Profit/ (loss) for the period 682,284 (62,777) 619,507 672,770 (52,423) 620,347 Profit attributable to: Owners of the Company 606,006 (62,777) 543,229 607,557 (50,267) 557,290 Non-controlling interests 76,278-76,278 65,213 (2,156) 63,057 682,284 (62,777) 619,507 672,770 (52,423) 620,347 Earnings per share Basic earnings per share US cents 9 73.01 65.45 73.20 67.14 Diluted earnings per share US cents 9 70.99 65.45 71.16 59.64 The accompanying notes form an integral part of these condensed consolidated interim financial statements. 3
DP World Limited and its subsidiaries Condensed consolidated statement of other comprehensive income Note USD 000 USD 000 (Unaudited) (Unaudited) Profit for the period 619,507 620,347 Other comprehensive income Items that are or may be reclassified to profit or loss: Foreign exchange translation differences foreign operations* 345,725 (229,875) Net change in fair value of available-for-sale financial assets (547) (3,909) Share of other comprehensive income of equity-accounted investees 13 436 (4,185) Cash flow hedges effective portion of changes in fair value 26,973 (77,603) Related tax on changes in fair value of cash flow hedges (2,909) 10,934 Items that will never be reclassified to profit or loss: Re-measurements of post-employment benefit obligations** 14,157 (217,266) Related tax (764) 4,999 Other comprehensive income for the period, net of tax 383,071 (516,905) Total comprehensive income for the period 1,002,578 103,442 Total comprehensive income attributable to: Owners of the Company 897,660 45,287 Non-controlling interests 104,918 58,155 1,002,578 103,442 * A significant portion of this includes foreign exchange translation differences arising from the translation of goodwill and purchase price adjustments which are denominated in foreign currencies at the Group level. The translation differences arising on account of translation of the financial statements of foreign operations whose functional currencies are different from that of the Group's presentation currency are also reflected here. There are no differences on translation from functional to presentation currency as the Company s functional currency is pegged to the presentation currency. ** Prior period includes reapportionment of USD 91,281 thousand pension fund deficit from a related party and increase in pension actuarial loss on account of decrease in discount rate during the reporting period. The accompanying notes form an integral part of these condensed consolidated interim financial statements. 4
DP World Limited and its subsidiaries Condensed consolidated statement of financial position 31 December Note USD 000 USD 000 (Unaudited) (Audited) Assets Non-current assets Property, plant and equipment 10 7,934,129 7,522,077 Investment properties 11 1,328,427 1,280,325 Intangible assets and goodwill 12 7,432,403 7,289,138 Investment in equity-accounted investees 13 2,002,949 1,951658 Other investments 63,304 60,644 Accounts receivable and prepayments 478,916 428,627 Total non-current assets 19,240,128 18,532,469 Current assets Inventories 81,737 79,124 Accounts receivable and prepayments 899,774 793,345 Cash and cash equivalents 14 1,630,799 1,299,391 Total current assets 2,612,310 2,171,860 Total assets 21,852,438 20,704,329 Equity Share capital 17 1,660,000 1,660,000 Share premium 2,472,655 2,472,655 Shareholders reserve 2,000,000 2,000,000 Retained earnings 6,126,507 5,495,181 Translation reserve (1,804,908) (2,124,021) Other reserves 18 (579,365) (705,964) Total equity attributable to equity holders of the Company 9,874,889 8,797,851 Non-controlling interests 904,719 721,834 Total equity 10,779,608 9,519,685 Liabilities Non-current liabilities Interest bearing loans and borrowings 19 7,120,930 6,874,777 Accounts payable and accruals 422,844 392,127 Deferred tax liabilities 961,260 945,257 Employees end of service benefits 120,201 112,594 Pension and post-employment benefits 210,041 314,691 Total non-current liabilities 8,835,276 8,639,446 Current liabilities Interest bearing loans and borrowings 19 426,135 743,482 Accounts payable and accruals 1,717,718 1,663,809 Income tax liabilities 87,056 129,722 Pension and post-employment benefits 6,645 8,185 Total current liabilities 2,237,554 2,545,198 Total liabilities 11,072,830 11,184,644 Total equity and liabilities 21,852,438 20,704,329 The accompanying notes form an integral part of these condensed consolidated interim financial statements. The condensed consolidated interim financial statements were authorised for issue on 24 August....... Sultan Ahmed Bin Sulayem Yuvraj Narayan Chairman and Chief Executive Officer Chief Financial Officer 5
U * * DP World Limited and its subsidiaries Condensed consolidated statement of changes in equity Attributable to equity holders of the Company Share Share Shareholders Retained Translation Other Noncontrolling Total capital premium reserve earnings reserve reserves Total interests equity USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Balance as at 1 January 1,660,000 2,472,655 2,000,000 4,722,382 (1,593,342) (494,861) 8,766,834 367,764 9,134,598 Profit for the period - - - 557,290 - - 557,290 63,057 620,347 Other comprehensive income, net of tax - - - - (223,919) (288,084) (512,003) (4,902) (516,905) Transactions with owners, recognised directly in equity Dividends paid (refer to note 8) - - - (249,000) - - (249,000) - (249,000) Transactions with non-controlling interests, recognised directly in equity Contributions by non-controlling interests - - - - - - - 2,000 2,000 Dividends paid - - - - - - - (21,441) (21,441) Balance as at 1,660,000 2,472,655 2,000,000 5,030,672 (1,817,261) (782,945) 8,563,121 406,478 8,969,599 Balance as at 1 January 1,660,000 2,472,655 2,000,000 5,495,181 (2,124,021) (705,964) 8,797,851 721,834 9,519,685 Profit for the period - - - 543,229 - - 543,229 76,278 619,507 Other comprehensive income, net of tax - - - - 319,113 35,318 354,431 28,640 383,071 Transactions with owners, recognised directly in equity Change in ownership interests without change in - - - - control of subsidiaries 403,497-403,497 119,890 523,387 Pension obligation borne by Parent Company * - - - - - 91,281 91,281-91,281 Dividends paid (refer to note 8) - - - (315,400) - - (315,400) - (315,400) Transactions with non-controlling interests, recognised directly in equity Contributions by non-controlling interests - - - - - - - 2,400 2,400 Dividends paid - - - - - - - (44,323) (44,323) Balance as at 1,660,000 2,472,655 2,000,000 6,126,507 (1,804,908) (579,365) 9,874,889 904,719 10,779,608 In, Group accounted USD 91,281 thousand additional defined benefit obligation in relation to the reapportionment of pension fund deficit from a related party. The re-apportioned liability was subsequently paid by the Parent company in the current period. The accompanying notes form an integral part of these condensed consolidated interim financial statements. 6
DP World Limited and its subsidiaries Condensed consolidated statement of cash flows Note USD 000 USD 000 (Unaudited) (Unaudited) Cash flows from operating activities Gross cash flows from operations 14 1,164,280 1,100,751 Changes in: Inventories (370) (9,294) Accounts receivable and prepayments (83,679) (122,336) Accounts payable and accruals (37,516) (41,566) Provisions, pensions and post-employment benefits (32,861) (22,691) Cash generated from operating activities 1,009,854 904,864 Income taxes paid (127,867) (82,739) Net cash from operating activities 881,987 822,125 Cash flows from investing activities Additions to property, plant and equipment 10 (486,309) (475,876) Additions to investment properties 11 (80,952) (77,923) Additions to port concession rights 12 (27,548) (32,321) Proceeds from disposal of property, plant and equipment and port concession rights 15,289 1,732 Net cash inflow on monetisation of subsidiaries without change in control 523,387 - Interest received 19,490 17,560 Dividend received from equity-accounted investees 66,429 37,555 Additional investment in equity-accounted investees (4,134) (8,350) Net loans from equity-accounted investees 2,504 40,941 Return of capital from equity-accounted investees 2,026 - Net cash from/ (used in) investing activities 30,182 (496,682) Cash flows from financing activities Repayment of interest bearing loans and borrowings (378,105) (888,380) Drawdown of interest bearing loans and borrowings 251,728 848,911 Proceeds from issue of 2023 Sukuk - 1,200,000 Redemption of Sukuk - (1,174,455) Transaction cost paid on issuance of 2023 Sukuk - (10,505) Interest paid (124,871) (171,027) Dividend paid to the owners of the Company (315,400) (249,000) Contribution from non-controlling interests 2,400 2,000 Dividend paid to non-controlling interests (44,323) (21,441) Net cash used in financing activities (608,571) (463,897) Net increase/ (decrease) in cash and cash equivalents 303,598 (138,454) Cash and cash equivalents as at 1 January 1,299,391 1,436,595 Effect of exchange rate fluctuations on cash held 27,810 (16,987) Cash and cash equivalents as at 14 1,630,799 1,281,154 The accompanying notes form an integral part of these condensed consolidated interim financial statements. 7
DP World Limited and its subsidiaries Notes to the condensed consolidated interim financial statements 1. Corporate information DP World Limited ( the Company ) was incorporated on 9 August 2006 as a Company Limited by Shares with the Registrar of Companies of the Dubai International Financial Centre ( DIFC ) under the Companies Law, DIFC Law No. 3 of 2006. These financial statements comprise the Company and its subsidiaries (collectively referred to as the Group ) and the Group s interests in equityaccounted investees. The Group is engaged in the business of development and management of international marine and inland terminal operations, maritime services, industrial parks and economic zones, logistics and ancillary services to technology-driven trade solutions. Port & Free Zone World FZE ( the Parent Company ), which originally held 100% of the Company s issued and outstanding share capital, made an initial public offer of 19.55% of its share capital to the public and the Company was listed on the Nasdaq Dubai with effect from 26 November 2007. The Company was further admitted to trade on the London Stock Exchange with effect from 1 June 2011 and voluntarily delisted from the London Stock Exchange on 21 January 2015. Port & Free Zone World FZE is a wholly owned subsidiary of Dubai World Corporation ( the Ultimate Parent Company ). The Company s registered office address is P.O. Box 17000, Dubai, United Arab Emirates. 2. Basis for preparation of the condensed consolidated interim financial statements The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. These condensed consolidated interim financial statements do not include all of the information required for full annual consolidated financial statements prepared in accordance with International Financial Reporting Standards. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended 31 December. The condensed consolidated interim financial statements were approved by the Board of Directors on 24 August. The condensed consolidated interim financial statements have been prepared on the historical cost basis, except for derivative financial instruments, investment at fair value through profit or loss and available-for-sale financial assets which are measured at fair value. 3. Significant accounting policies The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December. 4. Use of estimates and judgements The preparation of the condensed consolidated interim financial statements, requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of income, expenses, assets and liabilities and the disclosure of contingent liabilities at the reporting date. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December. 8
DP World Limited and its subsidiaries Notes to the condensed consolidated interim financial statements 5. Segment information The Group has identified the following geographic areas as its basis of segmentation. The Group measures segment performance based on the earnings before separately disclosed items, interest, tax, depreciation and amortisation ( Adjusted EBITDA ). Asia Pacific and Indian subcontinent Australia and Americas Middle East, Europe and Africa Each of these operating segments have an individual appointed as Segment Director responsible for these segments, who in turn reports to the Chief Operating Decision Maker. In addition to the above reportable segments, the Group reports unallocated head office costs, finance costs, finance income and tax expense under the head office segment The Group measures segment performance based on the earnings before separately disclosed items, interest, tax, depreciation and amortisation ( Adjusted EBITDA ). Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, investment properties, and port concession rights other than goodwill. Information regarding the results of each reportable segment is included below. 9
DP World Limited and its subsidiaries Notes to the condensed consolidated interim financial statements 5. Segment information (continued) The following table presents certain results, assets and liabilities information regarding the Group s segments as at the reporting date. Asia Pacific and Indian subcontinent Australia and Americas Middle East, Europe and Africa Head office Inter-segment Total 30June 30June USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenue 343,145 254,493 362,713 330,526 1,596,528 1,541,871 - - - - 2,302,386 2,126,890 Adjusted for separately disclosed items (7,933) (33,107) - - - - - (7,933) (33,107) Revenue before separately disclosed items 335,212 221,386 362,713 330,526 1,596,528 1,541,871 - - - - 2,294,453 2,093,783 Adjusted EBITDA 229,017 163,129 140,331 152,580 945,062 869,219 (89,490) (8,978) - - 1,224,920 1,175,950 Finance income - - - - - - 52,057 73,430 - - 52,057 73,430 Finance costs - - - - - - (217,811) (215,469) - - (217,811) (215,469) Tax expense - - - - - - (76,128) (90,997) - - (76,128) (90,997) Depreciation and amortisation (50,065) (32,438) (42,938) (38,091) (203,010) (194,404) (4,741) (5,211) - - (300,754) (270,144) Adjusted net profit/ (loss) for the year before separately disclosed items 178,952 130,691 97,393 114,489 742,052 674,815 (336,113) (247,225) - - 682,284 672,770 Adjusted for separately disclosed items (11,813) - - - 571 (6,160) (51,535) (46,263) - - (62,777) (52,423) Profit/ (loss) for the year 167,139 130,691 97,393 114,489 742,623 668,655 (387,648) (293,488) - - 619,507 620,347 Net finance cost and tax expense from various geographical locations and head office have been grouped under head office. 10
DP World Limited and its subsidiaries Notes to the condensed consolidated interim financial statements 5. Segment information (continued) Asia Pacific and Indian subcontinent Australia and Americas Middle East, Europe and Africa Head office Inter-segment Total 31 December 31 December 31 December 31 December 31 December 31 December USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 (Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited) Segment assets 4,462,056 4,350,319 2,195,357 2,092,970 16,811,207 15,333,720 9,491,539 9,205,350 (11,107,721) (10,278,030) 21,852,438 20,704,329 Segment liabilities 624,366 605,616 465,794 379,373 3,534,901 3,455,870 8,422,843 8,524,199 (3,023,390) (2,855,393) 10,024,514 10,109,665 Tax liabilities * - - - - - - 1,048,316 1,074,979 - - 1,048,316 1,074,979 Total liabilities 624,366 605,616 465,794 379,373 3,534,901 3,455,870 9,471,159 9,599,178 (3,023,390) (2,855,393) 11,072,830 11,184,644 30June USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Capital expenditure 30,197 37,046 70,663 80,951 493,329 466,538 620 1,585 - - 594,809 586,120 Depreciation 20,836 11,662 29,056 27,198 163,667 154,976 4,741 5,212 - - 218,300 199,048 Amortisation 29,229 20,776 13,882 10,893 39,343 39,427 - - - - 82,454 71,096 Share of profit/ (loss) of equity-accounted investees before separately disclosed items 60,900 62,147 (9,814) 9,541 9,110 (2,758) - - - - 60,196 68,930 Tax expense * - - - - - - 76,128 82,462 - - 76,128 82,462 *Tax liabilities and tax expenses from various geographical locations have been grouped under head office. 11
DP World Limited and its subsidiaries Notes to the condensed consolidated interim financial statements 6. Income tax The Group s effective tax rate in respect of continuing operations is as below: Six months ended (Unaudited) Six months ended (Unaudited) Before separately disclosed items 13.11% 16.14% Including separately disclosed items 14.25% 16.32% 7. Separately disclosed items Six months ended Six months ended USD 000 USD 000 (Unaudited) (Unaudited) Revenue: Construction contract revenue relating to service concessions 7,933 33,107 Cost of sales: Construction contract costs relating to service concessions (7,933) (33,107) General and administrative expenses - (6,160) Other income 571 - Share of profit from equity-accounted investees (11,813) - Finance income: Change in fair value of convertible bond option - 59,570 Finance costs: Change in fair value of convertible bond option (41,124) - Interest accretion on convertible bond (10,411) (9,938) Premium on early redemption of sukuk - (61,755) Transaction costs written off on restructuring of loan - (40,325) Ineffective interest rate swap loss - (2,350) Income tax credit - 8,535 Total (62,777) (52,423) Construction contract revenue and costs: In accordance with IFRIC 12 Service Concession Arrangements, the Group has recorded revenue on the construction of a port in the Asia Pacific and Indian subcontinent region. The construction revenue represents the fair value of the construction services provided in developing the port. No margin has been recognised, as in management s opinion the fair value of the construction services provided approximates the construction cost. General and administrative expenses represents restructuring costs of a subsidiary in the Middle East, Europe and Africa region. Other income represents non-recurring income in a subsidiary in the Middle East, Europe and Africa region. Share of profit from equity-accounted investees relates to the impairment of goodwill in an equity-accounted investee in the Asia Pacific and Indian subcontinent region. 12
DP World Limited and its subsidiaries Notes to the condensed consolidated interim financial statements 7. Separately disclosed items (continued) Change in fair value of convertible bond option relates to the movement based on re-measured fair value of the embedded derivative liability of the convertible bonds. Interest accretion on convertible bond represents the accretion of liability component as at the reporting date to the amount that will be payable on redemption of the convertible bond. Premium on early redemption of sukuk represents the redemption premium paid on an early redemption of sukuk bond liability. Transaction costs written off on restructuring of loan relates to a subsidiary in the Middle East, Europe and Africa region. Ineffective interest rate swap loss relates to an ineffective element of a hedge in a subsidiary in the Middle East, Europe and Africa region. Income tax credit relates to a subsidiary in the Middle East, Europe and Africa region. 8. Dividends paid Dividends relating to amounting to USD 315,400 thousand were paid during the period ended ( : USD 249,000 thousand) 9. Earnings per share The calculation of basic and diluted earnings per share is based on the profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding. Adjusted for Adjusted for Before separately Before separately separately separately disclosed items disclosed items disclosed items disclosed items USD 000 USD 000 USD 000 USD 000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Profit attributable to the ordinary shareholders of the Company (a) 606,006 543,229 607,557 557,290 Add/ (deduct): costs/ (income) related to convertible bonds saved as a result of the conversion 9,372 60,907 9,320 (40,312) Profit attributable to the ordinary shareholders of the Company after conversion (b) 615,378 604,136 616,877 516,978 Weighted average number of basic shares outstanding as at 31 December (c) 830,000 830,000 830,000 830,000 Weighted average numbers of shares due to conversion of convertible bond 36,847 36,847 36,847 36,847 Total weighted average number of ordinary share (diluted) outstanding (d) 866,847 866,847 866,847 866,847 Basic earnings per share US cents (a/c) 73.01 65.45 73.20 67.14 Diluted earnings per share US cents (b/d) 70.99 65.45* 71.16 59.64 Anti-diluted earnings per share US cents (b/d) - 69.69 - - * Diluted earnings per share (adjusted for separately disclosed items) for the period ended is equal to basic earnings per share (adjusted for separately disclosed items) as it is antidilutive. 13
DP World Limited and its subsidiaries Notes to the condensed consolidated interim financial statements 10. Property, plant and equipment During the six months period ended, the Group acquired assets amounting to USD 486,309 thousand ( : USD 475,876 thousand). The depreciation on property, plant and equipment during the six months period ended amounted to USD 199,804 thousand ( : USD 183,457 thousand). Assets with a net carrying amount of USD 14,274 thousand were disposed by the Group during the six month period ended ( : USD 1,623 thousand), resulting in a gain on disposal of USD 1,015 thousand ( : gain of USD 109 thousand). 11. Investment properties During the six months period ended, the Group invested USD 80,952 thousand (30 June : USD 77,923 thousand) and has incurred a depreciation charge of USD 18,496 thousand ( : USD 15,591 thousand). 12. Intangible assets and goodwill Port concession rights During the six months period ended, the Group acquired port concession rights amounting to USD 27,548 thousand ( : USD 32,321 thousand). The amortization of port concession rights during the six months period ended amounted to USD 67,872 thousand ( : USD 56,502 thousand). Goodwill During the six months period ended, the reduction in goodwill represents the impact of foreign currency translation of USD 63,951 thousand ( : USD 69,220 thousand). Land-use rights The amortization of land-use rights during the six months period ended amounted to USD 14,582 thousand ( : USD 14,594 thousand). 14
DP World Limited and its subsidiaries Notes to the consolidated financial statements 13. Investment in equity-accounted investees The following table summarises the segment wise financial information for equity-accounted investees, adjusted for fair value at acquisition and reconciled to the carrying amount of the Group s interest in equity-accounted investees as included in the condensed consolidated interim statement of financial position: Asia Pacific and Indian subcontinent Australia and Americas Middle East, Europe and Africa Total 31 December 31 December 31 December 31 December USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 (Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited) Cash and cash equivalents 592,956 432,726 170,439 147,176 200,332 203,733 963,727 783,635 Other current assets 174,286 232,754 119,855 111,735 259,082 186,858 553,223 531,347 Non-current assets 6,171,290 6,167,755 2,182,512 2,146,178 2,626,043 2,459,574 10,979,845 10,773,507 Total assets 6,938,532 6,833,235 2,472,806 2,405,089 3,085,457 2,850,165 12,496,795 12,088,489 Current financial liabilities - - 595,452 595,272 42,180 37,734 637,632 633,006 Other current liabilities 369,260 317,386 162,255 170,598 255,504 249,081 787,019 737,065 Non-current financial liabilities 997,486 1,092,416 1,251,143 1,009,024 567,471 534,625 2,816,100 2,636,065 Other non-current liabilities 463,981 466,819 70,114 137,061 570,507 520,062 1,104,602 1,123,942 Total liabilities 1,830,727 1,876,621 2,078,964 1,911,955 1,435,662 1,341,502 5,345,353 5,130,078 Net assets (100%) 5,107,805 4,956,614 393,842 493,134 1,649,795 1,508,663 7,151,442 6,958,411 Group s share of net assets in equity-accounted investees 2,002,949 1,951,658 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 USD 000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenue 673,660 734,487 306,512 287,573 332,857 276,693 1,313,029 1,298,753 Depreciation and amortisation (127,682) (150,752) (46,519) (51,131) (48,597) (47,676) (222,798) (249,559) Other expenses (283,033) (286,545) (219,445) (205,248) (234,899) (220,831) (737,377) (712,624) Finance costs (37,048) (36,134) (115,905) (119,933) (20,144) (20,042) (173,097) (176,109) Finance income 11,250 8,504 24,724 110,388 (915) 1,633 35,059 120,525 Income tax expense (64,628) (72,317) (2,123) (13,086) (8,848) (11,171) (75,599) (96,574) Net profit/ (loss) 172,519 197,243 (52,756) 8,563 19,454 (21,394) 139,217 184,412 Group s share of profit/ (loss) (before separately disclosed items) 60,900 62,147 (9,814) 9,541 9,110 (2,758) 60,196 68,930 Group s share of other comprehensive income 436 (4,185) 15