AD Ports Group unveiled a series of major expansion works at its Abu Dhabi base, including creation of industry-specific clusters. Then, there were the overseas forays. Image Credit: Supplied

Dubai: The AD Ports Group sailed through the Dh1 billion profit mark, weighing in at Dh1.3 billion against Dh845.69 million a year ago and 2020’s Dh394.43 million. 2022 was also the year when the ADX-listed firm expanded into key regional markets and also at its Abu Dhabi base, which includes the KIZAD cluster.

Revenues for the year were at Dh5.51 billion against Dh3.9 billion in 2021, while the net profit margin was at 23.7 per cent. “Group revenue grew 41 per cent year-on-year to Dh5.51 billion, ‘mainly driven by the maritime cluster and effect from new acquisitions’.

In February last year, AD Ports Group went through a $1.1 billion share listing process for an ADX debut. That in turn fuelled one of the biggest forays into regional markets, with a slew of port and terminal contracts, including greenfield ones. Locally, there were acquisitions that would help deliver future growth in the high value logistics services.

The balance-sheet says as much. The 'asset base increase was driven by investments in JVs and associates (Aramex, NMDC), continued growth-oriented organic capex as well as intangible and goodwill effect of recent acquisitions," AD Ports Group said. "Balance-sheet remained strong with well-balanced capital structure and enough debt liquidity to drive both organic and inorganic growth aspirations.

The net debt to EBITDA ratio is at 1.9x against 2.3x end 2021. Total assets came to Dh38.5 billion.

“2022 was an exceptional year for AD Ports Group with strong results reflecting the effectiveness of our ambitious growth strategy, and the focus on delivering on our promises to our shareholders and stakeholders," said Capt. Mohamed Juma Al Shamisi, Managing Director and Group CEO. For 2023, we will be focusing on maximising returns and generating portfolio synergies, while providing our customers with superior end-to-end supply chain outcomes."

Cluster approach

Going forward, the company will be hoping to generate more returns from the multiple clusters being created with private sector partners, including in the food and automotive spaces at KIZAD.

'Accelerate' M&A
AD Ports Group has set sights on creating organic revenue-generating avenues through a Dh15 billion capex program over the next five years. Spending touched Dh1.4 billion in Q4-2022 and Dh5.6 billion for full year in 2022, thus accelerating pace of M&A activity. This saw seven such deals being completed or announced last year.

Ports Cluster

This grew 7 per cent year-on-year to Dh1.13 billion 'backed by a healthy product mix as well as revenue from the acquisition of TCI, one of the two entities under IACC, Egypt'. Double-digit growth in concession fees and leases as well as a rebound in the Ro-Ro and cruise businesses helped offset a drop in general cargo volumes.

Maritime Cluster

This was brought on from ‘strategic expansion and service offering diversification’ from recent years. The revenue growth of 256 per cent year-on-year came to Dh2.16 billion, with new business segments such as feedering, chartering, transhipment, and offshore services starting to make a mark.

The Maritime Cluster added four new companies to the portfolio - Divetech Marine Engineering Services, Alligator Shipping Container Line, Transmar, one of the two entities of IACC-Egypt, and Safeen Surveys and Subsea Services.

Logistics Cluster

This one registered a 12 per cent year-on-year revenue drop to Dh532 million in 2022 ‘mainly due to the reduction in the vaccine business with the easing of the pandemic’. Plus, there was the revision of a contract with a key client ‘from a short-term asset heavy to a longer-term asset light model, as well as temporary lower volumes due to the non-availability of empty containers for exports’.

Digital Cluster

Revenues grew 11 per cent year-on-year to Dh400 million in 2022, driven by progress on 'various technology-led solutions'.

"AD Ports Group maintains a solid financial position and robust balance-sheet, with significant capital resources still available for both organic and inorganic growth going forward," said Martin Aarup, Group Chief Financial Officer.  "With the recent M&A transactions announced, we update our medium-term guidance (5Y organic CAGR between 2022-27) to 25-30 per cent for revenue and 20-25 per cent for EBITDA."