Ports operator cuts losses with sale but faces new challenges this year
Australia's second-largest ports operator, DP World, narrowed its losses last year after it booked a one-off gain from the sale of a controlling stake in an Adelaide container terminal.
Accounts filed with the corporate regulator show DP World Australia made a loss of $32 million for the year to the end of December, compared with a $74 million loss in 2011. Revenue from the Australian operations, which includes container terminals in Melbourne, Sydney, Brisbane and Fremantle, rose by 15 per cent to $592 million.
The latest result included a net gain of almost $47 million from the sale in July of a 60 per cent stake in Adelaide's container port operation to Flinders Ports. Without the sale, the Australian operations would have posted a larger loss in 2012 than the year before.
DP World Australia and rival Patrick, which is a division of listed transport company Asciano, have faced difficult trading conditions. The two stevedores will also be stripped of their duopoly on Australia's waterfront this year when Hutchison Ports finally begins operations in Brisbane and Sydney.
Hutchison is also expected to be among the leading candidates to win the right to operate a new container terminal at Melbourne's Webb Dock. A short-list will be named within the next two months.
In a bid to bolster its defences, DP World is spending $250 million on its Brisbane container terminal, which includes 14 new straddle carriers used to shift containers.
DP World would not respond to questions about the financial health of the Australian business. DP World Australia's board includes Citi Infrastructure's co-head, Felicity Gates.
Citi Infrastructure and a Canadian pension fund bought 75 per cent of DP World's Australian ports business in late 2010 for $1.5 billion. The sale helped pay down the large debt of DP World's parent, Dubai World, following the collapse of the Middle Eastern city's property market in 2007.
DP World's management has remained to oversee the Australian container terminals and its 2000-strong workforce.
Patrick is also replicating its automated terminal in Brisbane at its Port Botany site in Sydney. The decision to replace manned jobs with machines will save Patrick an estimated $50 million a year.