Dubai government’s investment vehicle reaped solid profits in H1 2022

The strength of the container trade in the global markets is believed to be increasing as the effects of the pandemic are slowly subsiding; thus bringing in more profits for freight operators across the board.

Meanwhile, Dubai-owned investment vehicle and ports giant DP World reported on Friday, August 19, a record 60.4% increase in revenue to $7.93 billion, giving off a $721 million first-half profit, 51.8% year-on-year (YoY) increase. 

DP World is wholly owned by Dubai World, a global holding company and long-term investor focusing on strategic sectors that will help Dubai’s economy to diversify. This includes, but is not limited to, transport and logistics, drydocks and maritime, urban development, investments, and financial services. 

On the other hand, DP World is one of the largest global supply chain businesses focusing on port terminals and cargo logistics. Their recent partnership with the Canadian public pension fund, Caisse de dépôt et placement du Québec (CDPQ), will help DP diversify its investments, possibly bringing the enterprise value to $23 billion. 

Hence, most of the investments DP World is looking to make will go into Europe, the Middle East, and Africa, roughly 66% of all investments, with Australia and the Americas taking 22% of the investments, the Asia Pacific and India 10%, and rest of the world 2%.

DP World investment targets. Source: GlobalSWF

Joint ventures 

In June 2022, DP World broadened its partnerships by signing agreements with India’s National Investment and Infrastructure Fund (NIIF), offering $300 million to the company to accelerate investments across ports and logistics in India. Furthermore, an additional partnership was formed with the UK’s development arm, British International Investment (BII) (formerly CDC Group), in Africa. 

The goal of this partnership is to modernize and expand three ports in Dakar (Senegal), Sokhna (Egypt), and Berbera (Somaliland). DP world expects to invest another $1 billion over the next several years to enhance Africa’s logistics and port businesses. 

Finally, DP World is conscious that the growth rate they experienced will not last long since they expect it to moderate in the year’s second half.

Overall, the macro and geopolitical environment are simply too unpredictable at the moment, partially due to rising inflation and the unknown outcome of the fallout from Russia’s invasion of Ukraine. 

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