AD Ports Group, one of the region’s premier facilitator of logistics, industry, and trade, said its revenue for the second quarter grew 35% y-o-y to hit AED1.24 billion ($337.5 million), up 25% y-o-y growth in H1 2022, achieving record results for H1 growth mainly driven by the Maritime and Economic Cities & Free Zones (EC&FZ) Clusters, and to a lesser extent by the Digital Cluster.
Announcing its financial results for the quarter ended 30 June 2022, AD Ports said the net profit growth accelerated to 59% y-o-y reaching AED300 million ($81.6 million) in Q2 2022 (+49% y-o-y growth in H1 2022) despite higher depreciation charges and higher finance costs from the ongoing investment program as well as higher provisions for ECL (Expected Credit Loss).
Ebitda increased 41% YoY to AED532 million in Q2 2022 (+37% YoY growth in H1 2022), with ebitda margin improving by close to 200 bps to 42.8%.
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, said the statement from AD Ports.
The Abu Dhabi group said the Ports Cluster Q2 2022 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 (LFL) basis, the Ports Cluster revenue grew by 20% YoY in Q2 2022.
The 22.32% stake in Aramex, which was transferred to AD Ports Group in January 2022, contributed AED12 million to ebitda and net profit in Q2 2022 (AED23 million in H1 2022).
Consolidated capital expenditure during Q2 2022 reached AED1.6 billion (AED 2.6 billion in H1 2022 vs. AED 1.1 billion in H1 2021), with the three main recipients by order of quantum being the Maritime Cluster (vessel fleet expansion), the Ports Cluster (Khalifa Port expansion and Etihad Rail connectivity), and the Economic Cities & Free Zones Cluster (new warehouses, gas network expansion and infrastructure-related investments to unlock additional land).
AD Ports Group said it 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 AED3.6 billion in the form of 10-year bonds that were issued under an EMTN Programme in 2021 and a cash position of AED1.8 billion, translating into a net leverage of 0.9x.
The group has a well-managed debt maturity profile with adequate liquidity lines, it added.
According to AD Ports, the $1 billion syndicated revolving credit facility (RCF) with a consortium of local and international banks secured in 2021 remains unutilised. The strategy continues to be to utilize bonds as the predominant long-term funding vehicle with the RCF serving as a liquidity backstop.
In June 2022, AD Ports Group reached an agreement with National Marine Dredging Company (NMDC) to launch a new JV, Safeen Surveys and Subsea Services.
The new company will offer offshore surveys and subsea services, including commercial diving services and unmanned vessel inspections, in the UAE, the GCC, and some international markets. In addition, the JV will provide innovative solutions to meet the needs of offshore operations related to the oil and gas and renewable energy sectors.
Managing Director and Group CEO Captain Mohamed Juma Al Shamisi 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, he stated, have continued to rebound from the severe supply chain disruptions of last year while its new ventures, enhanced service offering, and diversification strategy into synergistic new businesses have been yielding positive results.
"In Q2, 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 AED172 billion by 2031," he added.
Group Chief Strategy and Growth Officer Ross Thompson 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% in H1 2022, with full-year forecasts expected to finish higher at near 1% y-o-y growth," he noted.
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, he added.