The long-term issuer rating of Dubai-based terminal operator DP World Limited has been upgraded to Baa1 from Baa2, Moody’s rating agency said.
“Our decision to upgrade DP World’s ratings reflects a strong track record in managing its business through industry cycles as well as achieving its growth ambitions, while maintaining a healthy financial profile,” Rehan Akbar, a Moody’s Vice President — Senior Analyst, said.
“DP World’s growing scale and geographic footprint has increased its business resilience which Moody’s now sees as more appropriately reflected in the Baa1 rating.”
The rating action reflects its diversified global operations; the positive expected long-term growth in international container traffic; its solid profitability and liquidity profile; its expected adherence to leverage targets as proven by management’s track record; and its flexibility to delay capex to support the balance sheet if needed.
The risk of escalation in trade tensions between the USA and its key trading partners creates significant uncertainty in global trading conditions and is a downside risk for DP World. Moody’s believes the increased uncertainty will adversely impact business confidence and delay investment decisions leading to a weaker global trade outlook in H2 2018 and potentially well into 2019.
Additionally, the company’s outlook on all ratings is stable, reflecting Moody’s view that DP World will remain resilient over an industry cycle as a result of its broad geographic footprint and financial flexibility.