AD Ports Group’s first-quarter revenue jumps by 73%

UAE’s AD Ports Group reported a 73 per cent year-on-year (YoY) rise in first-quarter revenue, driven by growth across the company’s maritime, economic cities & free zones and ports clusters as well as acquisitions completed in 2022 and Q1 2023.

The shipping and logistics group’s revenue in the first three months of the year reached $495m (Dhs1.81bn) from Dhs1.04 in the same period a year earlier.

The group’s net profit soared 18 per cent YoY to Dhs363m in Q1 2023 compared to Dhs306m a year ago.

AD Ports’ earnings before interest, taxes, depreciation and amortisation (EBITDA) in the first three months of the year reached Dhs699m, with a margin of 38.5 per cent.

“The group’s performance across its five clusters demonstrates our strong business resilience with over 70 per cent of Q1 2023 revenue being long-term, sticky and recurring business,” said Mohamed Juma Al Shamisi, managing director and Group CEO at AD Ports Group.

The company’s maritime cluster posted revenue growth of 259 per cent YoY to Dhs915m in Q1 2023, bolstered by a combination of capacity increases, wider service offerings and increased activity in new business segments.

We have announced our financial and operational results for the first quarter of 2023 with growth in revenue driven by robust performance of our Maritime, Economic Cities & Free Zones (EC&FZ) and Ports Clusters.

Discover more: https://t.co/1EcZgQvT1d#ADPortsGroup #Quarterly pic.twitter.com/umjHlnVzFy

— AD Ports Group (@ADPortsGroup) May 15, 2023

The acquisitions of Divetech, ASCL, Safeen Subsea and Transmar accounted for 30 per cent of the cluster’s revenue. AD Ports said the key business segments driving growth in the maritime cluster include marine, feeder (container and bulk), and offshore services.

Similarly, the economic cities and free zones cluster reported top-line growth of 13 per cent YoY to Dhs429m in the first quarter of the year, driven by previously signed leases, higher utility revenues and the merger with EAJ – which contributed Dhs73m.

The group’s ports cluster said its Q1 2023 revenue soared by 24 per cent to Dhs314m, the logistics cluster contributed Dhs139m to the group’s first quarter revenues and the digital cluster’s revenues reached Dhs101m in the quarter.

AD Ports’ investment strategy

AD Ports’ generated net operating cash flows of Dhs335m in the quarter, but the Abu Dhabi-based firm said the heavy and front-loaded capex program continued to weigh on free cash flows, resulting in a negative free cash flow of Dhs544m during Q1 2023.

“As we press ahead with our five-year capex plan (2023-27) of around Dhs15bn and further expand our capabilities and market presence,” added Al Shamisi.

The ports operator, controlled by state investor ADQ, operates the deepwater Khalifa Port in Abu Dhabi along with other ports and logistics parks in the city and the Indian Ocean Fujairah port.

The group said its focus now is the completion of the previously announced acquisitions of 100 per cent of Noatum, a logistics services provider with a presence in 26 countries across five continents as well as an 80 per cent equity stake in Dubai-based Global Feeder.

AD Ports expects the acquisitions to broaden its global footprint while scaling the company’s logistics and freight forwarding business internationally, turning the Abu Dhabi-based firm into the largest pure feeder operator in the GCC region and the third largest globally by container capacity with close to 100,000 TEUs.

“AD Ports currently expects the closing of the Noatum acquisition no later than Q2 2023 and GFS acquisition no later than Q3 2023,” the company said in a bourse filing.

Earlier in May, the group acquired five bulk carriers and three crude oil tankers for Dhs955m to advance its commercial shipping capabilities. Over the past half-decade, the UAE has risen into the upper echelons of the global maritime industry as the Gulf state has evolved into a key logistics hub.

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