UAE’s AD Ports Group sees net profit rise 59% YoY to Dhs300m in Q2 2022

Abu Dhabi Ports Group recently announced its financial results for Q2 2022.

The group’s revenue grew 35 per cent YoY to Dhs1.242bn in Q2 2022 (reflecting an increase of 25 per cent in year-on-year (YoY) growth in H1 2022), achieving record results for H1 growth mainly driven by the Maritime and Economic Cities & Free Zones (EC&FZ) Clusters, and the Digital Cluster.

The Ports Cluster revenue performance was hampered by an unfavourable base effect from the one-off sand supply contract that ran from March until October 2021. However, on a like-for-like basis, the Ports Cluster revenue grew by 20 per cent YoY.

According to the Abu Dhabi Media Office, earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased 41 per cent YoY to Dhs532m in Q2 2022 (reflecting an increase of 37 per cent in YoY growth in H1 2022), with the EBITDA margin improving by close to 200 basis points to 42.8 per cent.

With the continued ramp-up of operations across all clusters, and barring one-off negative impacts, the group’s EBITDA performance should continue to be supported by higher operating leverage going forward.

Net profit growth accelerated to 59 per cent YoY reaching Dhs300m in Q2 2022 (reflecting a 49 per cent rise in YoY growth in H1 2022) despite higher depreciation charges and higher finance costs from the ongoing investment programme as well as higher provisions for ECL (expected credit loss).

The 22.32 per cent stake in Aramex, which was transferred to AD Ports Group in January 2022, contributed Dhs12m to EBITDA and net profit in Q2 2022 (Dhs23m in H1 2022).

Consolidated capital expenditure during Q2 2022 reached Dhs1.6bn (Dhs2.6bn in H1 2022 versus Dhs1.1bn in H1 2021).

AD Ports Group maintains a robust capital structure with adequate liquidity and investment grade credit ratings to cater to its future growth. As of Q2 2002, the group had total debt of Dhs3.6bn in the form of 10-year bonds that were issued under an EMTN Programme in 2021 and a cash position of Dhs1.8bn, translating into net leverage of 0.9x.

The group has a well-managed debt maturity profile with adequate liquidity lines. The $1bn syndicated revolving credit facility (RCF) with a consortium of local and international banks secured in 2021 remains unutilised. The strategy continues to be to utilise bonds as the predominant long-term funding vehicle with the RCF serving as a liquidity backstop.

Captain Mohamed Juma Al Shamisi, MD and group CEO, AD Ports Group, said: “The momentum of our growth journey has accelerated throughout the first half of the year, and we anticipate continuing to deliver on our performance for the remainder of the year. The group’s core businesses have continued to rebound from the severe supply chain disruptions of last year while our new ventures, enhanced service offering, and diversification strategy into synergistic new businesses have been yielding positive results.”

He added: “In Q2 2022, we continued to invest heavily in order to deliver future growth. Moreover, we have also benefitted from the macro picture in the Gulf region, and in the UAE in particular. Not only have oil prices been increasing sharply, which has accelerated the country’s economic growth, including the non-oil economy, but AD Ports Group is also well-positioned to be one of the key beneficiaries of Abu Dhabi’s Industrial Strategy, which aims to more than double the size of its manufacturing sector to Dhs172bn by 2031.”

Ross Thompson, group chief strategy and growth officer, AD Ports Group, said: “Global markets are still turbulent with a high inflation environment, rising interest rates, geopolitical tensions as well as continued ramifications of the COVID-19 pandemic, including supply chain disruptions and supply shortages.

“Therefore, pressure on global trade volumes is increasing with macroeconomic headwinds, lockdowns in China and a ‘cost of living crisis’ but has been largely offset by post-Covid-19 pent-up demand for goods for the time being. As a result, global seaborne container trade volumes decreased around 2.5 per cent in H1 2022, with full-year forecasts expected to finish higher at near 1 per cent YoY growth.”

Thompson added: “On the other hand, shipping rates remain at extraordinary levels and their outlook for the rest of the year remains positive, with continuing disruptions providing support despite trade headwinds.

“In this challenging global context, our unique integrated business model, built upon a firm foundation of long-term contracted revenues, offers good revenue stability and visibility while our extensive investment programme, both organically and through acquisitions, provides a healthy growth platform.”