Dubai port operator loses 60% of profits amid Red Sea disruptions

DP World, a key Dubai-based port operator, reported earnings on Thursday, showing a ~60% drop in profit due to attacks in the Red Sea by Yemen’s pro-Iranian Houthi rebels, who claim revenge for Israel’s attack on Gaza, Associated Press. reports.

In the same reporting period last year, DP World posted a profit of US$651 million. A year later, thanks in part to ongoing Houthi attacks on the Red Sea shipping line, DP World’s profits fell to $265 million.

“The year 2024 was marked by a deteriorating geopolitical environment and disruptions to global supply chains due to the Red Sea crisis,” DP World Chairman and CEO Sultan Ahmed bin Sulayem said in a statement to media in Dubai.

Bin Sulayem did not provide specific details on the Red Sea losses, but suggested the company was still able to deliver “stable” adjusted full-year profits.

DP World operates through Dubai’s Jebel Ali port and while the Houthi campaign is said to be targeting ships linked to the US, Britain and Israel, others are also suffering from the attack and shippers have been forced to take the long route. , avoiding Dubai and traveling around the Cape of Good Hope in southern Africa.

In mid-July, Goldman Sachs’ last pound chain congestion the briefing noted that for the first time in 1.5 years, the supply chain congestion index was on the verge of rising from two to three, with 10 being the most congested. This resurgence of tangled supply chains is mainly driven by the increase in the number of container ships waiting and the increase in ocean container shipping rates, partly due to the Houthi campaign.

Earlier this month, shipping giant Maersk told the media that the supply chain was at breaking point, with its CEO stating: “The repercussions of the situation in the Red Sea continue to spread around the world, creating challenges for supply chains and our customers.

By Charles Kennedy for Oilprice.com

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