UAE’s maritime sector has always been of great significance, well before the discovery of oil. Livelihoods revolved around shipbuilding, fishing and pearl diving. Fast forward to now, the UAE boasts more than 20 prominent ports that occupy the status of being among the best maritime hubs anywhere. The marine industry here is currently estimated to be worth more than Dh90 billion annually.
One of the leading companies is Abu Dhabi headquartered Al Seer Marine. This IHC subsidiary company has a market cap of Dh9.9 billion, offering a variety of marine services, including vessel construction, operation and refurbishment for government and private customers. Al Seer Marine has been rapidly expanding its commercial shipping business with a keen interest in product tankers, gas tankers, and dry bulk shipping sectors.
Al Seer Marine demonstrated a strong financial performance for H1-2022, with revenue doubling year-on-year from Dh273 million to Dh475 million, driven by strategic investments and growing product services such as freight solutions for bulk cargo. The acquisition of Very Large Gas Carriers (VLGCs and Very Large Crude Carriers (VLCC) are expected to bolster the already extensive portfolio further and contribute to long-term earnings.
The company aims to increase its fleet by acquiring 10 to 15 ships, and be the largest in the MEA maritime market. This is in addition to the additive manufacturing unit, which uses computer-aided design (CAD) software or 3D object scanners to produce lighter, stronger parts and systems. This enables engineers to design pieces with increased complexity in drastically shorter timeframes and with little wastage, thus reducing overall costs. Al Seer Marine is clearly on a trajectory to generate revenue from multiple sources whilst gaining best-in-class capabilities and limiting cost.
The company has entered a strategic joint venture with Dutch maritime solutions company Damen Shipyards and Singapore-based DTec Industries to build, sell and maintain high-quality and cost-effective marine vessels. This is a category expected to increase from $170.75 billion in 2021 to $188.57 billion in 2028, with 80 per cent of global trade done through the high seas. The agreement will add value for shareholders by helping clients mitigate supply chain risk and strengthening Al Seer Marine’s position in the Asian-Pacific region.
Al Seer Marine must continue to be watchful in these unprecedented market conditions to maximize opportunities to scale up and enhance earnings. The company at present doesn’t pay any dividends, which essentially means that all its profits have been reinvested. This without a doubt, has contributed to the strong earnings growth rate and which has ultimately benefited shareholders.