AD Ports Group, a leading facilitator of global trade, logistics, and industry, today reported strong operational and financial performance during the first quarter of this year with revenue more than doubling year-on-year (YoY) to AED3.89 billion ($1.06 billion), +22% YoY on a like-for-like (LFL) basis after adjusting for the effect of mergers and acquisitions (M&A). 

 

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 total net profit growth of 10% YoY to AED400 million, and a net profit after Minorities of AED314 million.

 

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, the group said.

 

Despite higher depreciation and amortisation 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 AED462 million, including AED62 million dividend income from the Group’s 10% investment in National Marine Dredging Company (NMDC).

 

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, normalisation of interest rates will also help narrow the gap between EBITDA performance and bottom-line growth, the group said.

 

Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO, 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. Guided by the vision of our wise leadership, the Group is well structured and has built solid foundations to support the ongoing diversification of its port-centric logistics global footprint in light of the ongoing global geopolitical disruptions and polarisation. We are confident that with assets in Pakistan, Spain, Jordan, Egypt, Congo Brazzaville, Angola, Uzbekistan, Kazakhstan, Georgia, and the UAE, AD Ports Group is well-placed to benefit in today’s challenging markets.”

 

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 utilisation of 55% compared to 51% in Q1 2023 and 52% in Q4 2023. At Khalifa Port, which accounted for 88% of total throughput, utilisation 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.

 

Container volumes increased more than four-fold YoY to 450,000 TEUs in Q1 2024; and marine services activities (vessel calls, towing services, pilot services) all experienced mid-single digit growth YoY.

 

With its combined feeder container shipping operations, which include GFS, Safeen Feeders, and Transmar, AD Ports Group loaded one TEU every 14 seconds in Q1 2024.

 

In the Logistics Cluster, polymer volumes increased 34% YoY in Q1 2024, while global ocean and air freight forwarding volumes increased 13% YoY and declined 3% YoY, respectively. Ocean freight forwarding volume good performance was driven by a mix of organic growth, especially in Turkey, new customer acquisition following the deployment of new solutions, and favourable market dynamics. As for air freight forwarding volumes, price discussions with some existing customers exerted pressure on volumes. 

 

In the Digital Cluster, Foreign Labour Services (FLS) transactions, external projects, and the start of security services (through Nishan Security Services) supported the operational performance of the cluster.

 

Martin Aarup, Group Chief Financial Officer, AD Ports Group, said: “Our strong Q1 2024 financial results reflect our prioritisation of synergistic and sustainable growth, coupled with revenue diversification and cost optimisation. The Group recorded EBITDA of AED1.04 billion in Q1 2024, up 49% year-on-year. Through prudent financial stewardship and focused capital allocation based on strategic priorities, we will continue to steer AD Ports Group against a volatile economic backdrop, ensuring it remains resilient in the face of economic turbulence and optimally positioned to capitalise on growth opportunities, whilst we progress along our value-enhancing trajectory.” 

 

Ross Thompson, Group Chief Strategy and Growth Officer, AD Ports Group, said:” Our growth strategy with complementary drivers – the operational ramp-up of existing assets, and M&A activity domestically and internationally – is well supported by our solid operational and financial results, and will ensure resilient expansion through economic and industry cycles. Going forward, we plan to commercialise and drive up utilisation of existing and upcoming assets, maximising their value, while we focus on consolidating our position in Abu Dhabi across all clusters, as foreign direct investments in the UAE continue to soar in line with the government’s aggressive strategy to diversify the economy away from the oil and gas sector.” - TradeArabia News Service