DP World, a Dubai-based port operator, disclosed a significant drop in profits for the first half of the year, attributing the decline to ongoing attacks by Yemen’s Houthi rebels amidst the Israel-Hamas conflict, causing disruptions in shipping through the Red Sea.
The company reported profits of $265 million for the current year, marking a substantial decrease from $651 million during the same period last year. Sultan Ahmed bin Sulayem, Chairman and CEO of DP World Group, acknowledged the impact of the Red Sea disturbances on the firm’s financial performance.
In a statement accompanying the results, Bin Sulayem highlighted the challenges faced in 2024 due to a deteriorating geopolitical environment and disruptions in global supply chains triggered by the Red Sea crisis. Despite the uncertainties in the near-term trading outlook stemming from macroeconomic and geopolitical pressures, he expressed confidence in the company’s resilient financial performance in the first half of the year, positioning DP World well to achieve stable full-year adjusted profits.
While Bin Sulayem did not provide specific details on the precise effects of the Houthi attacks on DP World, the company, which is government-owned, withdrew from the Nasdaq Dubai stock exchange in recent years.
The Houthi rebels have been targeting shipping routes through the Red Sea corridor since November in response to the Israel-Hamas conflict in Gaza. These attacks have disrupted the transit of approximately $1 trillion worth of goods annually through the region, leading to heightened naval conflicts involving the U.S. Navy, unprecedented since World War II.
The rebels claim that their actions are aimed at vessels associated with Israel, the United States, or the United Kingdom, as part of an effort to pressure for an end to the ongoing war. However, many of the targeted vessels have minimal or no connection to the conflict.
In response to the disruptions, some shippers have opted to bypass the Red Sea entirely by navigating around the Cape of Good Hope in Southern Africa. This rerouting has impacted shipping activities at Dubai’s Jebel Ali Port, the world’s largest manmade harbor and the headquarters of DP World.
