Global port operator DP World says outlook uncertain as Q2 volumes fall

Volumes handled in the first six months of the year were down 5.3 percent at 33.8 million containers, DP World said. (AFP file photo)
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Updated 27 July 2020

Global port operator DP World says outlook uncertain as Q2 volumes fall

  • Coronavirus pandemic shut cities and factories worldwide for months, disrupting shipments and global supply chains,

DUBAI: Global port operator DP World recorded a fall of 8.8 percent in second quarter container volumes, warning on Monday the outlook remained uncertain.
The coronavirus pandemic shut cities and factories worldwide for months, disrupting shipments and global supply chains, while some cities are now reintroducing curbs after a recent rise in infections.
The Dubai state-owned company, which also operates logistics facilities, handled 16.7 million shipping containers in the second quarter, down from 18.3 million a year earlier.
It recorded its biggest quarterly decline in the Asia Pacific and Indian subcontinent region, where volumes fell 12.2 percent to 7.2 million containers.
“Overall, we are encouraged that our business has performed better than expected and, while the outlook is still uncertain, we remain positive on the medium- to long-term fundamentals of the industry,” Chairman Sultan Ahmed bin Sulayem said in a statement.
Volumes handled in the first six months of the year were down 5.3 percent at 33.8 million containers, DP World said.


Japan’s NTT to spend $38 billion to buy out, take DoCoMo private

Updated 29 September 2020

Japan’s NTT to spend $38 billion to buy out, take DoCoMo private

  • Move is intended to enhance the competitiveness of the NTT group as it consolidates its services

MITO, Japan: Japanese telecoms giant Nippon Telegraph & Telephone, or NTT, announced Tuesday it will spend $38 billion to buy out and take private its mobile unit NTT DoCoMo in one of the largest ever deals of its kind.
NTT and NTT DoCoMo executives released details of the plan Tuesday.
The move is intended to enhance the competitiveness of the NTT group as it consolidates its services, said NTT’s CEO Jun Sawada.
“We want to be a game changer,” Sawada said.
He said that between Sept. 30-Nov. 16 the company would buy DoCoMo’s shares at a price of $34.46. DoCoMo’s shares were last trading at $28.39. NTT held about 66 percent of DoCoMo’s shares as of March 31.
The acquisition will be financed by bridge loans, not a share offering, the company said.
The restructuring dovetails with newly installed Prime Minister Yoshihide Suga’s push for lower telecoms rates and more consumer and business-friendly services. It is expected to enable DoCoMo to offer cheaper rates in competition with rivals such as SoftBank and KDDI.
Suga has made expanding digital services a main part of his policy agenda and has called for reforms of the industry’s complex pricing policies and relatively inflexible contract arrangements. Pressures to improve such services have intensified with the push for remote work during the coronavirus pandemic.
NTT’s shares fell 2.7 percent ahead of the announcement, which was made after markets closed. DoCoMo’s shares were suspended from trading. Share prices for other NTT subsidiaries surged ahead of the announcement.
NTT DoCoMo is Japan’s largest mobile carrier, with more than 70 million subscribers. It was founded in 1992. According to its website, it holds a 44.2 percent market share compared with the 32 percent share held by KDDI’s au brand. SoftBank is third ranked, with a nearly 24 percent share.
Although DoCoMo is the market leader, its profits have been eroding, a factor that helped drive the decision to consolidate.
Sawada said there was no direct link between the buyout and cutting mobile subscription prices.
“However, by doing this, DoCoMo will get stronger. That’s why we are doing this. As the result of this, we could build a stable foundation which apparently could give us power to decrease the price,” he said.
The NTT buy out is the biggest ever in Japan and one of the largest worldwide. The biggest so far was the $48 billion acquisition of Dallas, Texas-based energy utility TXU Corp., now known as Energy Future Holdings, by Kohlberg Kravis Roberts, the Texas Pacific Group and Goldman Sachs Capital Partners in 2007.
A trend toward such deals appears to be gathering pace, as Japanese companies sitting on big cash piles adjust their business strategies in a time of growing uncertainty.
NTT traces its roots to 1869, the early days of the telegraph in Japan. Founded in 1952 as the government phone utility, it was privatized in 1987. The company has expanded its network services as its fixed line business has been largely supplanted by mobile phones, at least for individual users.
Japan’s mobile phone rates are on average about half the costs charged in the US and much lower than in Canada and South Korea, according to a study by telecoms services research firm cable.co.uk.
At about $3.90 for 1 gigabyte (1G) of mobile data, however, costs in Japan are far higher than in many European and Asian countries, such as China, where 1G cost 61 cents and India, where the cost was only 9 cents.