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Saturday, May 04, 2024

P&O Ferries owner reports record-breaking profits after mass sacking

P&O Ferries owner reports record-breaking profits after mass sacking

DP World called ‘corporate gangster’ after announcing half-year profits of £600m

The Dubai-based owner of P&O Ferries has been accused of behaving like “corporate gangsters” after celebrating record-breaking profits just months after sacking 800 of its UK-based workers without notice.

DP World, which is ultimately owned by the Dubai royal family, said in March that firing 786 P&O seafarers and replacing them with much cheaper agency workers was the only way to ensure the “future viability” of the historic ferry business.

However, on Thursday Sultan Ahmed bin Sulayem, DP World’s chair and chief executive, announced the company had increased its first-half revenues by 60% to $7.9bn (£6.6bn) and profits had risen by more than 50% to a record $721m.

“We are delighted to report a record set of first-half results with … attributable earnings [profits] rising 51.8%,” he said in the company’s earning’s statement on Thursday. “Overall, the strong first-half performance leaves us well placed to deliver improved full year results.”

DP World did not give separate details on the performance of its ferries business in its results, but the bulk of revenues and profits come from other divisions. It operates ports in 78 countries on six continents including London Gateway and Southampton, and bought P&O in 2006 for £3.3bn.

DP World had told a parliamentary inquiry that P&O “had no future” unless it sacked the workers. At a Commons hearing in March, Peter Hebblethwaite, the boss of P&O, said the company had chosen to break the law and sack the 800 workers without notice or consultation because “no union could accept our proposals”.

The staff were told in video calls on the ships that it was their “final day of employment” and ordered off the ferries.

Hebblethwaite’s testimony prompted MPs to ask whether he was a “shameless criminal”, but he insisted he would “make this decision again”.

However, Hebblethwaite told an industry conference in May: “We have not conducted ourselves on the day, or since, in anything like the way that has been suggested of me and us.”

Frances O’Grady, the general secretary of the Trades Union Congress (TUC), on Thursday accused DP World of making “eye-watering profits … off the backs of P&O illegally sacking hundreds of dedicated staff”.

“DP World have been allowed to get away scot-free with behaving like corporate gangsters,” she said. “They are an insult to common decency.

“Ministers should have stripped DP world of all their lucrative public contracts and severed all commercial ties with the company.”

The TUC has written to the Insolvency Service, which is carrying out criminal and civil investigations into the company, saying its directors should be disqualified.

The Insolvency Service investigation is being watched closely by the government, which has said it is unable to take direct action against the directors of P&O Ferries despite the company admitting to breaking the law.

Boris Johnson had initially promised to take legal action in the courts against the company, but a week later it emerged that this was not the case, and that the government would instead rely on the Insolvency Service investigation.

Proposed legislation the government said would ensure P&O and other ferry operators pay seafarers the minimum wage was outlined during the Queen’s speech earlier in May. However, port operators and the TUC both cast doubt on whether the proposed laws would have any effect in practice.

When it announced the sackings P&O said it had “made a £100m loss year on year” which had been “covered by our parent DP World”.

“This is not sustainable,” the company said. “Our survival is dependent on making swift and significant changes now. Without these changes there is no future for P&O Ferries.”

The company had asked the government for a £150m bailout after trade collapsed during the pandemic. However, the government turned down the request for help after it was reported to have paid out £270m in dividends to investors.

At the time a DP World spokesperson said the £270m of dividends related “to a delisting process, which was announced pre-Covid-19 and which DP World is legally obliged to pay”.

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