AD Ports posts record Q3 net profit of Dh975 million, up 64%

Dubai: AD Ports Group posted a record quarterly net profit of Dh975 million for the third quarter, up 64 per cent from a year earlier. Revenue rose 48 per cent to Dh7.99 billion, the Abu Dhabi company reported its financial results on November 11. Disruptions in the Strait of Hormuz continued to impact UAE ports operations during the period.

Profit and margins

EBITDA grew faster than sales. It climbed 63 per cent to Dh1.97 billion, lifting the margin to 24.6 per cent from 22.3 per cent. Profit before tax rose 81 per cent to Dh1.08 billion. Owners’ share of net profit climbed 73 per cent to Dh767 million. Revenue for the first nine months increased 41 per cent to Dh20.83 billion. Net profit grew 64 per cent to Dh2.46 billion.

Response to Hormuz disruption

Management leaned on the national programme to strengthen supply chain resilience. Since March, the group has rerouted cargo and feeder services to Fujairah Terminals and Khor Fakkan Port, both outside the Strait of Hormuz. It also deployed new land and air bridges and added warehousing.

Afif Saif Al Yafei, Group Chief Executive Officer, said that the double-digit, top-line growth came in “one of the most challenging periods in its 20-year history”. The results are “a testimony to the Group’s operational resilience, integrity, and its real time-relevant range of unique, customer-centric end-to-end solutions, which overcame macroeconomic and geopolitical uncertainty to reach new levels of income and revenue growth,” he noted.

Ports rebound but trails last year

The Ports Cluster rebounded from the second quarter but trailed last year. UAE container throughput fell 57 per cent year on year to 751,000 TEUs, yet rose more than 30 per cent quarter on quarter. Bulk and general cargo volumes dropped 54 per cent to 4.5 million tonnes, then rebounded 48 per cent.

UAE container capacity utilisation reached 29 per cent, up from 22 per cent. International utilisation hit 73 per cent, from 61 per cent. Cluster revenue rose 12 per cent to Dh798 million. EBITDA grew 8 per cent to Dh388 million, a margin of 48.7 per cent.

Shipping drives growth

Maritime and Shipping drove the quarter, contributing 58 per cent of group revenue. Cluster revenue soared 56 per cent to Dh4.74 billion. EBITDA more than doubled to Dh1.23 billion, a margin of 26.0 per cent. Container feeder volumes held flat year on year and rose 22 per cent quarter on quarter to 900,000 TEUs, while rates climbed on both fronts. The fleet of bulk, multipurpose and Ro-Ro vessels reached 76, up from 48.

Logistics and free zones expand

Logistics revenue jumped 76 per cent to Dh1.96 billion, or 24 per cent of the group total. EBITDA rose 246 per cent to Dh116 million, a thin margin of 5.9 per cent. UAE polymer volumes fell 36 per cent year on year but rebounded 14 per cent from the second quarter.

Economic Cities and Free Zones added 1.2 sq km of net new industrial land leases at KEZAD Abu Dhabi, taking net additions this year to 3.2 sq km. Revenue rose 15 per cent to Dh690 million. EBITDA grew 6 per cent to Dh398 million at a 57.7 per cent margin.

Cash flow and leverage

Cash flow from operations tripled to Dh2.94 billion, with cash conversion of 150 per cent. Net leverage fell to 3.5x from 4.4x a year ago and 3.7x in the second quarter. Free cash flow to the firm turned negative at Dh691 million because the group funded the CLI acquisition. Excluding the deal, it would have been positive at Dh1.17 billion.

Acquisitions and new projects

AD Ports completed its largest-ever acquisition, Brazil’s Corredor Logística e Infraestrutura (CLI), on October 1. CLI is the country’s leading independent agri-bulk port terminal operator. Al Yafei says the deal will give the business “a strong, new international dimension”. A direct rail service with Etihad Rail now links Fujairah Terminals to the Industrial City of Abu Dhabi. JINGDONG Property will build about 150,000 sq m of warehousing in KEZAD, with delivery due in 2028.

L’IMAD offer and delisting

L’IMAD Holding Company, an Abu Dhabi sovereign investor, offered Dh6.25 ($1.70) a share for AD Ports. It now holds 98.93 per cent and will buy out the remaining shareholders. Settlement is expected on December 22. AD Ports will then delist from the Abu Dhabi Securities Exchange.