AD Ports Group (ADX: ADPORTS), a leading facilitator of global trade, logistics, and industry, today announced its financial results for the 3 months ending 31st March 2024, reporting strong operational and financial performance, with revenue more than doubling Year-on-Year (YoY) to AED 3.89 billion, +22% YoY on a Like-For-Like (LFL) basis after adjusting for the effect of mergers and acquisitions (M&A).
Strong Results
In Q1 2024, AD Ports Group completed the acquisition of APM Terminals Castellon in Spain, Sesé Auto Logistics in Europe, Karachi Gateway Terminal Multipurpose Limited (KGTML) in Pakistan, Dubai Technologies in the UAE, and GFS in the UAE.
Both Revenue and EBITDA growth were driven by the Maritime & Shipping, Ports, Logistics, and Digital Clusters, as well as M&A effect, particularly Noatum’s acquisition, which was completed on 30th June 2023, and GFS’ acquisition, which was completed on 31st January 2024.
The Group EBITDA margin of 26.7% is well within the 25-30% range guidance confirmed at the end of 2023 for the medium term.
Despite higher depreciation and amortization charges (+64% YoY) as well as finance costs (+70% YoY) in Q1 2024, and M&A transaction costs, Profit Before Tax and Minorities grew by an impressive 27% YoY to AED 462 million, including AED 62 million dividend income from the Group’s 10% investment in National Marine Dredging Company (NMDC).
The introduction of corporate income tax in the UAE in 2024 and the higher share of profits coming from foreign operations (also taxable) resulted in a Total Net Profit growth of 10% YoY to AED 400 million, and a Net Profit after Minorities of AED 314 million.
Revenues and profits associated with recent organic and inorganic investments are yet to be fully reflected in the Group’s financial performance going forward. Furthermore, normalization of interest rates will also help narrow the gap between EBITDA performance and bottom-line growth.
Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO, of AD Ports Group, said: “We are pleased to have continued the momentum of a successful 2023 through the first quarter of 2024, delivering strong financial and operational results more than doubling our year-on-year revenues and recording healthy profits. This performance highlights our unwavering commitment to excellence and growth as a top player in global trade and logistics…”
Operational Performance
Operationally, the Ports Cluster saw container throughput grow to 1.37 million Twenty-foot Equivalent Units (TEUs) in Q1 2024, +26% YoY, driven by higher overall utilization of 55% compared to 51% in Q1 2023 and 52% in Q4 2023. At Khalifa Port, which accounted for 88% of total throughput, utilization at the two operational container terminals increased sharply to 62%, up from 55% in Q1 2023 and 56% in Q4 2023. On an LFL basis (adjusting for KGTL and Noatum), container volumes grew 14% YoY.
General cargo volumes rose by 36% YoY to reach 13.4 million tonnes in Q1 2024, compared with 9.8 million tonnes in Q1 2023, largely driven by the consolidation of Noatum and KGTML.
Ro-Ro volumes increased by more than fourfold YoY to 307,000 vehicles in Q1 2024, including the consolidation of Noatum’s volumes, while cruise passenger volumes declined 8% YoY during the quarter due to the impact of the Red Sea disruptions on the Aqaba Cruise Terminal operations (+2% YoY in cruise passenger volumes in the UAE).
In the Economic Cities & Free Zones (EC&FZ) Cluster, 1.4 sq km of additional new leases (net) were signed in Q1 2024. Occupancy in KEZAD Communities continued to improve, reaching 61% in the first quarter of 2024, up from 47% in Q1 2023 and 60% at the end of 2023. Demand for gas remained steady (-1% YoY), and warehouse occupancy improved further to 88%, up from 71% in Q1 2023 and 87% in Q4 2023.
In the Maritime & Shipping Cluster, all operational indicators recorded strong growth in Q1 2024. The total vessel fleet reached 263, up from 184 in Q1 2023, adding capacity across all business segments – Marine Services, Container, Bulk, Ro-Ro, and Offshore & Subsea.
With the consolidation of GFS effective 1st February 2024, AD Ports Group has become the world’s third largest feeder container shipping company by capacity, with a container vessel fleet of 49 and a total vessel fleet capacity of 139,000 TEUs. Maritime connectivity, a key element in the integrated supply chain ecosystem that has been nurtured in Abu Dhabi over the past few years, has leapfrogged with the acquisition of GFS, significantly strengthening the UAE Capital’s hub-and-spoke model with 23 feeder services, connecting customers to 28 countries and 78 ports along key trade routes for Abu Dhabi.
Financial Performance
The EC&FZ Cluster recorded revenue growth of 7% YoY to reach AED 461 million in Q1 2024, driven by warehouse leases and KEZAD Communities as utilization rates in these two business segments continue to increase steadily.
The cluster’s EBITDA amounted to AED 305 million for the quarter, translating into an EBITDA margin of 66%, compared to 68% in Q1 2023 and 63% adjusted for a one-off in Q4 2023.
The Ports Cluster’s revenue grew by 80% YoY to AED 565 million in Q1 2024, fuelled by strong growth of 55%, 115%, and 271% YoY in port leases, general cargo handling, and Ro-Ro handling. This growth was bolstered by the contribution of Noatum and KGTML in the general cargo business and Noatum in the Ro-Ro business while the continued ramp-up of South Quay and KPL at Khalifa Port supported strong momentum in the port leasing business. Additional container revenues, including that from the container terminal in Pakistan-Karachi (KGTL) and Noatum’s container activities in Spain, have further boosted the cluster’s top-line performance since Q3 2023. Adjusting for the M&A effect, consisting of Noatum Terminals business in Spain (3-month contribution) and Pakistan’s KGTL (3-month contribution) and KGTML (2-month contribution), Ports Cluster revenue increased by 17% YoY in Q1 2024.
As expected, the Red Sea disruptions have had a positive impact on the cluster’s Shipping business, which represented 54% of the cluster’s total revenue in Q1 2024, up from 46% in 2023 given the 2-month contribution of GFS. About 29% of the feeder container volumes transported in Q1 2024 were related to the 7 Red Sea services operated during the quarter. Both demand and rates for shipping operations in the Red Sea have been trending higher and current conditions seem to be entrenched and are likely to persist in the coming quarters.
The Logistics Cluster’s revenue jumped almost seven-fold YoY to AED 1.08 billion in Q1 2024, primarily driven by the consolidation of Noatum Logistics (3-month contribution) and Sesé Auto Logistics (2-month contribution), and the start of operations of ADL-Ulanish (1-month contribution), a new logistics JV in Uzbekistan. LFL revenue growth for the cluster reached 49% YoY, supported by the polymer business and additional organic revenues from ADL-Ulanish.
The cluster’s EBITDA almost tripled YoY to AED 93 million in Q1 2024, implying an EBITDA margin of 9% vs. 23% in Q1 2023 and 6% adjusted for one-offs in Q4 2023.
The Digital Cluster’s revenue grew by 50% YoY to AED 151 million in Q1 2024 (+38% YoY on a LFL basis, adjusting for the consolidation of TTEK (3-month contribution) and Dubai Technologies (1-month contribution). This growth was driven by higher revenue from Foreign Labour Service (FLS) transactions and external projects, and the start of security services (through Nishan Security Services).
The cluster’s EBITDA amounted to AED 94 million in Q1 2024 (+60% YoY), resulting in an EBITDA margin of 62% vs. 58% in both Q1 2023 and Q4 2023.
On the Balance Sheet front, total assets grew 34% YoY to AED 58.3 billion in Q1 2024, while total equity increased 12% YoY to AED 25.0 billion.
Net debt to EBITDA ratio dropped to 3.4x in Q1 2024, from 4.4x at the end of 2023, on the back of the strong quarterly EBITDA performance, which better reflected, although not fully yet, recently completed M&A transactions. The Group’s lower leverage continues to support investment-grade credit ratings.
The Group’s Capital Expenditure (CapEx) reached AED 1.27 billion in Q1 2024, in line with the Group’s front-loaded AED 12-15 billion organic capex guidance between 2024 and 2028.
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Source: ADPortsgroup
