Trade tensions will make 2019 challenging, says DP World chief

Freight containers on a container ship at DP World Southampton. The head of the ports operator said the psychological impact of US-China trade tensions were starting to translate into reality. (Reuters)
Updated 18 November 2018

Trade tensions will make 2019 challenging, says DP World chief

DUBAI: Global ports operator DP World believes international trade tensions such as those between the US and China will make 2019 challenging but not unmanageable, its chairman said on Sunday.
The Dubai government-controlled ports operator cautioned in August about geopolitical risks and changes in trade policies as first-half profit fell 2.1 percent.
DP World Chairman Sultan Ahmed bin Sulayem told Reuters he believed the psychological impact of trade tensions involving the US were starting to translate into reality.
Financial institutions were becoming increasingly cautious and taking measures such as tightening lending in reaction to trade tensions, he said in an interview at the DP World Tour Championship golf tournament in Dubai.
That is likely to have a negative impact on growth in emerging markets, he said.

 

 DP World, one of the world’s largest port operators, was taking measures to reduce costs, and is addressing how it will manage a challenging 2019, said bin Sulayem.
“We are finding ways to make sure that we do well in 2019,” he said. He declined to comment when asked if the company would report a higher profit this year.
“Historically, we have managed worse scenarios than this,” he said of global market conditions, adding that DP World had reached its goals in 2018.
DP World is in a dispute with the government of Djibouti, which in February seized a port in the country operated by the Dubai company under a 50-year concession.
Bin Sulayem repeated a denial that the government of Djibouti has offered to buy DP World’s stake in the concession. He said he asked them to make an offer in January.
They have not taken “any measures to contact us,” he said.
DP World has also launched legal proceedings in Hong Kong against China Merchants over allegations they have infringed on their concession rights in Djibouti, he said.

FASTFACTS

BACKGROUND

Trade tensions were evident in Papua New Guinea on Sunday when Asia-Pacific leaders failed to agree on a communique at a summit for the first time in their history as deep divisions between the US and China over trade and investment stymied cooperation.


Huawei’s third-quarter revenue jumps 27% as smartphone sales surge

Updated 17 October 2019

Huawei’s third-quarter revenue jumps 27% as smartphone sales surge

  • American companies, significantly disrupting its ability to source key parts
  • Huawei was all but banned by the United States in May from doing business with American companies

SHENZHEN, SHANGHAI: Huawei Technologies Co. Ltd’s third-quarter revenue jumped 27%, driven by a surge in shipments of smartphones launched before a trade blacklisting by the United States expected to hammer its business.
Huawei, the world’s biggest maker of telecom network equipment and the No. 2 manufacturer of smartphones, was all but banned by the United States in May from doing business with American companies, significantly disrupting its ability to source key parts.
The company has been granted a reprieve until November, meaning it will lose access to some technology next month. Huawei has so far mainly sold smartphones that were launched before the ban.
Its newest Mate 30 smartphone — which lacks access to a licensed version of Google’s Android operating system — started sales last month.
Huawei in August said the curbs would hurt less than initially feared, but could still push its smartphone unit’s revenue lower by about $10 billion this year.
The tech giant did not break down third-quarter figures but said on Wednesday revenue for the first three quarters of the year grew 24.4% to 610.8 billion yuan.
Revenue in the quarter ended Sept. 30 rose to 165.29 billion yuan ($23.28 billion) according to Reuters calculations based on previous statements from Huawei.
“Huawei’s overseas shipments bounced back quickly in the third quarter although they are yet to return to pre-US ban levels,” said Nicole Peng, vice president for mobility at consultancy Canalys.
“The Q3 result is truly impressive given the tremendous pressure the company is facing. But it is worth noting that strong shipments were driven by devices launched pre-US ban, and the long-term outlook is still dim,” she added.
The company said it has shipped 185 million smartphones so far this year. Based on the company’s previous statements and estimates from market research firm Strategy Analytics, that indicates a 29% surge in third-quarter smartphone shipments.
Still, growth in the third quarter slowed from the 39% increase the company reported in the first quarter. Huawei did not break out figures for the second quarter either, but has said revenue rose 23.2% in the first half of the year.
“Our continued strong performance in Q3 shows our customers’ trust in Huawei, our technology and services, despite the actions and unfounded allegations against us by some national governments,” Huawei spokesman Joe Kelly told Reuters.
The US government alleges Huawei is a national security risk as its equipment could be used by Beijing to spy. Huawei has repeatedly denied its products pose a security threat.
The company, which is now trying to reduce its reliance on foreign technology, said last month that it has started making 5G base stations without US components.
It is also developing its own mobile operating system as the curbs cut its access to Google’s Android operating system, though analysts are skeptical that Huawei’s Harmony system is yet a viable alternative.
Still, promotions and patriotic purchases have driven Huawei’s smartphone sales in China — surging by a nearly a third compared to a record high in the June quarter — helping it more than offset a shipments slump in the global market.