UPDATE 1-UAE's DP World H1 profit down 34% on lower volumes

* H1 profit falls to $188 million

* CEO says difficult to tell if market is recovering

* Not been approached for stake sale, decision up to board

(Adds CEO comment, analyst, details, background)

By John Irish

DUBAI, Aug 27 (Reuters) - Dubai government-controlled Port
operator DP World's DPW.DI first-half profit fell 34 percent
on lower container volumes, but it expects to meet 2009
expectations after cost cuts and focus on emerging markets.

In a statement on Thursday, it said net income in the six
months to June 30 fell to $188 million after it saw a 10 percent
decline in container volumes.

International shipping has been knocked hard by the global
economic downturn, largely due to overcapacity caused by a
construction boom that took place before the slump began.

"The first six months of 2009 have continued to present a
very challenging operating environment across the portfolio,"
the Dubai-based firm said in a statement.

The World Trade Organisation expects global trade volumes to
fall 9 percent in 2009 in the biggest contraction since World
War Two as demand collapses in the most serious economic
downturn in decades.

Chief executive Mohammed Sharaf told a conference call the
company was in line to meet full year expectations, but declined
to give estimates.

"Currently (with these) market conditions, we cannot see
what will happen tomorrow, we cannot say for sure the recovery
has started yet ... let's wait and see what happens in the
second half of the year," Sharaf said.

Revenues stood at $1.384 billion in the first half of the
year, from $1.598 billion in the same period in 2008, while
earnings before interest tax depreciation and amortisation were
$535 million from $652 million. Throughput fell to 12.3 million
twenty foot equivalent units from 13.6 million in 2008.

"The United Arab Emirates region was hit the least and we
see Middle East market growing faster and Asia is another we
will be seeing growth there," Mohammed Sharaf said.

Shares of DP World rose by 3 percent in early trading on the
Nasdaq Dubai. The stock was up 0.48 percent at $0.42.

"GDP growth rates are forecast to rise and at some point
that will have to follow through into increased volumes of goods
moving around the world," said Ali Khan, managing director and
head of brokerage at Arqaam Capital. "This should lead to an
uptick in the number of containers DP World handles and the
margin on these containers."

Sharaf said he expected volumes to improve slightly in the
next half, but any improvement would be offset by a decline in
its non-container operations, including its bulk business.

Morgan Stanley slashed its price target in June on the
operator to 32 cents, saying the market was underestimating the
depth and duration of the container port downturn, particularly
in the Middle East.

DUBAI WORLD FLAGSHIP

DP World is arguably the flagship company for state-owned
Dubai World, whose real estate unit Nakheel is struggling to
refinance a $3.52 billion Islamic bond maturing in December.
Dubai World said in July it had liabilities close to $60
billion.

DP World's net debt was $4.79 billion, as of June 30.

Sharaf dismissed any suggestion the port operator would need
financial backing saying it had "all the cash it needs" with no
corporate debt maturing until 2012.

Sharaf said the firm had never been approached to sell a
stake to a private equity firm and any decision would be up to
the company's board. "There is no update ... we haven't been
approached by anybody," he said.

Dubai World said in May it was in talks to sell a stake in
the port operator after it was approached by a regional private
equity firm to sell a minority stake.

The company has posptponed about half of its capacity
expansion plans, including the London Gateway, due to the
downturn to focus on developments nearing completion. It expects
full capital expemditure in 2009 to be the region of $800
million to $1 billion.
(Additional reporting by Matt Smith; Editing by Dan Lalor)