DP World to buy South Africa’s Imperial Logistics for $890m

[Suldaanka]

DP World recorded a 10.2 per cent increase in first-quarter container shipping volumes. AP Photo / Kamran Jebreili

Fareed Rahman

Jul 8, 2021

DP World, one of the largest port operators globally, plans to buy South Africa’s Imperial Logistics for $890 million, strengthening its footprint in the world’s second largest continent.

Johannesburg-listed logistics Imperial Logistics is an integrated logistics and market access company with operations in Africa and Europe.

“The acquisition of Imperial will help DP World to build better and more efficient supply chains for the owners of cargo, especially in Africa,” Sultan Bin Sulayem, group chairman and chief executive of DP World, said in a statement. “Imperial’s operations are complementary to our network of ports, terminals and logistics operations on the continent.”

The deal, to be funded from DP World’s existing available resources, is expected to close by the first quarter of 2022. The share price of Imperial Logistics surged nearly 34 per cent following the offer announcement by DP World.

DP World’s cash offer of 66 South African rand (ZAD) per share implies an equity consideration of around ZAD12.7 billion ($890 million) and represents a premium of 39.5 per cent to the Imperial share price as of July 7 on the Johannesburg Stock Exchange, and a 34.2 per cent premium to the 30-day volume weighted average price, according to the statement.

The transaction, however, is subject to Imperial’s shareholder approval and other customary completion conditions including regulatory approvals.

With a focus on fast-growing industries including healthcare, consumer, automotive, chemicals, industrial and commodities, Imperial has a presence across 25 countries, including a significant footprint in the high growth Africa market.

The ports operator said its acquisition of Imperial will add new capabilities to DP World, particularly in Africa as it aims to improve connectivity between African producers along fast-growing trade lanes to the rest of the world.

Lucrative trade routes

The move builds on DP World’s significant expansion across the African continent in recent years with its investments in sea ports, terminals and logistics services as it seeks to tap into lucrative trade routes in the region. Its existing investments in Africa include projects in Egypt, Algeria, Djibouti, Rwanda, Somaliland, Mozambique and Senegal, according to the company’s website.

Earlier this month, DP World acquired US logistics firm Syncreon for a total enterprise value of $1.2bn. Syncreon is a US-based global logistics provider specialising in the design and operation of complex supply chains for the high-growth automotive and technology industries.

Last month, DP World said it opened a new container terminal at Berbera Port in Somaliland, with work under way to further expand the terminal’s capacity and develop it into a major regional trade hub serving the Horn of Africa. The newly opened container terminal increases the port’s container capacity from current 150,000 Twenty Foot Equivalent Units (TEUs) to 500,000 TEUs annually.

In May, the Dubai-based ports operator said it will start development of a greenfield deepwater port in the Democratic Republic of Congo, following amendments to the initial contract between the company and the government. In March 2018, DP World was awarded a 30-year concession to develop and manage the $1bn Banana Port along the DRC’s Atlantic coast in a joint venture with the government.

The ports operator also launched an e-commerce platform, Dubuy.com, in April to increase trade with Africa and boost the reach of companies from the UAE and world to the continent.

Last year, the ports operator signed an agreement with Senegal to develop its Ndayane deep-water port, making it the company’s biggest port investment in Africa at that time. DP World Dakar said it will invest a total of $1.1bn over two phases of the project, aimed at boosting Dakar’s position as a major logistics hub and gateway to west and north-west Africa.

DP World recorded a 10.2 per cent increase in first-quarter container shipping volumes and anticipated delivering an improved performance in 2021, as the global economy recovers from the Covid-19 pandemic.

The ports operator handled 18.9 million TEUs in the first three months of 2021, up from 17.2m TEUs in the same quarter last year. All its regions recorded growth, led by the Americas and Australia, where volumes rose 17.7 per cent to 2.7m containers.

Global trade is set to improve after a rebound in the second half of last year due to pent-up demand for consumer durables from advanced economies such as cars and the resumption of supply chains in emerging markets, according to the International Monetary Fund. Trade is forecast to expand 8.4 per cent this year and 6.5 per cent next year after shrinking 8.5 per cent in 2020, according to the fund’s estimates.

Updated: July 8th 2021, 9:12 PM

[Suldaanka]

DP World’s second-quarter shipping volumes rise 17% as global trade rebounds

Port operator handled 19.7 million twenty-foot equivalent units across its container terminals in the second quarter of 2021

DP World’s terminal within the wider Port of London. The port operator says its strong start to 2021 leaves it well-placed to deliver an improved full-year performance. AFP

Deena Kamel

Jul 28, 2021

DP World, one of the world’s largest port operators, reported a 17.1 per cent increase in second-quarter container shipping volumes and expects an “improved” full-year performance as the near-term trading environment remains positive.

The port operator handled 19.7 million twenty-foot equivalent units, or TEUs, across its global portfolio of container terminals in the second quarter of 2021, up from 16.7m TEUs in the same quarter a year ago, it said on Wednesday.

All regions where it operates recorded growth during the period, led by India and the Asia-Pacific region.

“Growth continued to be broad based, with all our regions delivering a robust performance, with India being exceptionally strong,” said group chairman and chief executive Sultan bin Sulayem.

“The strong start to 2021 leaves us well-placed to deliver an improved full-year performance and we remain focused on delivering our 2022 targets.”

Global trade is expected to improve after a rebound brought about by pent-up demand for consumer durables from advanced economies, such as cars, and the resumption of supply chains in emerging markets.

While the International Monetary Fund issued a warning on Tuesday that vaccine inequality could affect the global economic recovery, it raised its trade growth estimate to 9.7 per cent this year and 7 per cent in 2022, after a contraction of 8.3 per cent in 2020.

At a consolidated level, DP World terminals handled 11.4m TEUs in the second quarter, a growth of 18.2 per cent on a reported basis and up 17.3 per cent on a like-for-like basis, it said.

DP World, which operates terminals from Peru to Australia, said its flagship Jebel Ali port in the UAE handled 3.4 million TEUs in the second quarter, up 4.2 per cent from the same period last year.

Ports in the Asia-Pacific region and India recorded 21.2 per cent growth in the second quarter, compared with the same period in 2020, the highest among all the regions where DP World operates.

The Americas and Australia followed with 18.2 per cent growth, while Europe, the Middle East and Africa expanded by 13.8 per cent.

During the first half of 2021, DP World handled 38.6 million TEUs, with gross container volumes increasing by 13.9 per cent, compared with the same period last year, on a reported basis and 13.3 per cent on a like-for-like basis.

The Dubai-based company said it remains positive about the near-term outlook but is concerned that uncertainty linked to the Covid-19 pandemic may disrupt a recovery in the global economy.

The IMF maintained its global economic forecast at 6 per cent but downgraded its growth outlook for emerging markets and developing economies due to the uneven access to vaccines and the emergence of Covid-19 variants that are hindering the shape of recovery.

“Looking ahead, the near-term outlook remains positive, but we do expect growth rates to moderate in the second half of 2021,” Mr bin Sulayem said.

“Furthermore, we remain mindful that the Covid-19 pandemic and geopolitical uncertainty could, once again, disrupt the global economic recovery.”

The port operator remains focused on growing profitability while managing its growth capital expenditure, he said.

Earlier this month, DP World said it plans to buy South Africa’s Imperial Logistics for $890m, further strengthening its footprint on the world’s second-largest continent.