UAE’s DP World raises $1.5bn with green sukuk

Dubai’s DP World has raised $1.5bn through a green sukuk to support the ports operator’s global decarbonisation efforts.

The sukuk, which was oversubscribed more than 2.3 times, will be listed on both Nasdaq Dubai and the London Stock Exchange.

“The robust demand for the sukuk was supported by its credit ratings – Moody’s (Baa2/Stable) and Fitch (BBB+/Stable) – as well as a strong ESG rating from Sustainalytics (Negligible risk),” said DP World.

The proceeds from the sukuk issuance will be used to fund eligible green projects in line with the company’s recently published sustainable finance framework. DP World said its current green projects cut across electrification, renewable energy, clean transportation and energy efficiency.

The Islamic bond was priced at a spread of 119.8 basis points (bps) above US treasuries with a 5.5 per cent coupon rate – one of the tightest spreads for a BBB+ rated corporate globally.

DP World’s current portfolio of green and sustainable assets is spread throughout the globe and runs through various elements of its diverse multi-functional business.

Decarbonisation is at the core of the company’s business, and the ports operator has committed to becoming carbon neutral by 2040 and net zero carbon by 2050.

DP World has included electrified freight transportation and hybrid vessels within clean transportation. The logistics group boasts several green buildings within its portfolio that meet internationally recognised green certification building standards, such as BREEAM and LEED.

DP World’s growth strategy

Meanwhile, though DP World’s first-half profit dropped by nearly 10 per cent from a year earlier and the company flagged an uncertain outlook for trade, its revenues surged by nearly 14 per cent year-on-year (YoY) to $9bn.

The company’s adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) grew by 7 per cent to $2.6m with an adjusted EBITDA margin of 28.9 per cent.

The company’s consolidated throughput rose by 0.4 per cent to just over 23 million, of which 11.59 million was in the second quarter, up 0.1 per cent compared to the same period a year ago.

DP World said net cash generated from operating activities stood at nearly $2m in H1 2023 compared to $1.93m a year ago. The company invested $910m in the first six months of 2023 from $741m in H1 2022.

The company, which operates in 73 countries, set its capital expenditure guidance for 2023 at approximately $2bn, which will be invested in the UAE, Jeddah (Saudi Arabia), London Gateway (United Kingdom), Dakar (Senegal), Callao (Peru) and DPW Logistics (South Africa).

The ports and logistics firm said in August that it will invest around $510m to build a new container terminal at the Kandla port in the Indian state of Gujarat. The new terminal, which is expected to be completed by early 2027, will boost container traffic in India and reduce the cost of logistics.

Read: DP World acquires 58% equity stake in Turkey’s Evyap Port