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Moody’s changes DP World outlook to positive
DP World has shown a solid operating performance year-to-date-says Moody's.
November 3, 2010 10:19 by Reuters
Moody’s changed its outlook for Dubai government-controlled DP World to positive from stable, citing solid performance and the company’s deleveraging process, the ratings agency on Tuesday.
DP World — one of the world’s largest port operators — has shown a solid operating performance year-to-date and the debt restructuring agreement for parent company Dubai World has not impacted the company’s profile, Moody’s said in a statement.
“The outlook change to positive for DP World reflects Moody’s view that the improving fundamentals for port operators – with increasing volumes of global trade flows, especially in emerging markets – are likely to remain favourable over the medium term,” said Martin Kohlhase, Assistant Vice President at Moody’s Corporate Finance Group in Dubai.
In October, DP World said the second half would be better than the first, boosted by strong container operations in the third quarter.
Container volumes in the third-quarter climbed 8 percent, on a consolidated basis, to 7.3 million TEU, or “twenty-foot equivalent container units”, the company had said.
The company’s first-half net profit after tax from continuing operations rose 10 percent to $206 million.
DP World’s intention to refinance in 2011 a $3 billion syndicated revolving credit facility maturing in October 2012 also contributed to the positive outlook, the ratings agency said.
“The change in outlook is also driven by DP World’s improving trend in operating performance combined with the announced intention to refinance outstandings under its $3 billion syndicated revolving credit facility in 2011. With the refinancing, DP World would strengthen its liquidity profile and would possibly extend its debt maturity profile,” it said.
The company, which is 77 percent owned by Dubai World, is seeking a listing on the London stock exchange after publishing its financial results next March.
In August, a document obtained by Reuters showed that Dubai World was prepared to sell prized assets including previously ringfenced DP World in a bid to raise as much as $19.4 billion to repay creditors.
State-owned Dubai World has secured support from all its creditors for a $25 billion debt restructuring plan in October.
Moody’s said the restructuring of Dubai World’s debt did not affect DP World and the parent has not taken any extraordinary cash distributions from DP World.
Moody’s also said DP World was among the core infrastructure businesses central to Dubai’s business strategy in the region, and therefore likely to be a holding that Dubai’s government would seek to retain strategically over the long-term.
(Reporting by Martina Fuchs; Editing by Jon Loades-Carter)