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AD Ports Group posted a string of strong first-quarter results, with net profit up 18% to AED 363 million ($99 million) and revenue soaring 73% to AED 1.82 billion, buoyed by the strength of its assets Performance.
These assets include maritime, economic cities and free zones, port clusters and acquisitions in 2022 and Q1 2023 – Transmar & TCI in Egypt and Divetech in Egypt, ASCL, Safeen Subsea and Al Eskan Al Jamae (EAJ) Abu Dhabi Compare.
EBITDA growth of 33% YoY to AED 699m in Q1 2023, driven by the maritime and ports cluster and acquisitions, implying an EBITDA margin of 38.5% for the quarter, compared to the 35-40% communicated to the company The short-term guidance is consistent with the market.
Maritime Cluster
The Maritime Cluster reported a 259% year-on-year increase in revenue to AED 915 million in the first quarter of 2023, driven by increased capacity, expanded service offerings and increased activity in new business areas. Contribution from newly acquired Divetech, ASCL, Safeen Subsea and Transmar accounted for 30% of the total maritime cluster revenue in Q1 2023. The main business sectors driving the growth of the maritime cluster are marine, feeder (container and bulk) and offshore services.
The Economic Cities and Free Zones Cluster reported a 13% year-on-year increase in revenue to AED 429 million in Q1 2023, driven by previously signed leases, higher utility revenues and the merger with EAJ, with contribution from EAJ (For the entire first quarter) about AED 73 million.
The Economic Cities and Free Zones cluster leased an additional 1.4 sq km in Q1 2023, on track to meet annual guidance of 3.5-4.0 sq km, and reported a 46% YoY increase in warehouse leases.
port cluster
The Ports Cluster reported a 24% year-on-year increase in revenue to AED 314 million in the first quarter of 2023. Port cluster container throughput to grow by 18% year-on-year in Q1 2023, due to gradual recovery from Covid-19 and supply chain disruptions and higher container utilization (51% in Q1 2023 vs. 43% in the previous quarter), as cooperative shipping lines are gradually shifting their regional cargo volumes to Khalifa Port in accordance with their contractual obligations. The ro-ro shipping volume of the port cluster increased by 32% year-on-year, the cruise passenger volume increased by 361% year-on-year, and the general cargo volume increased by 40% year-on-year.
The logistics cluster contributed AED139 million in revenue to the group in the first quarter of 2023, down 3% year-on-year, as its performance was impacted by temporary maintenance closures of strategic customers’ production plants and the end of the Covid-19 vaccine business.
Digital clusters, which contributed AED 101 million to the group’s revenue in the first quarter of 2023, were relatively stable as its performance was impacted by lower demand for internal IT services.
capital expenditure plan
AD Ports Group continues to advance its ambitious revenue-generating capex plan to diversify revenue as planned, spending AED 1.02 billion in Q1 2023.
On the balance sheet side, AD Ports Group maintains a healthy financial profile and leverage, with a net debt-to-EBITDA ratio of 2.1x at the end of Q1 2023, with limited short-term debt service obligations.
In terms of cash flow, the Group generated AED 335 million in net operating cash flow in the first quarter of 2023, a significant increase year-on-year. The heavy upfront capex program continues to weigh on free cash flow as planned, resulting in negative free cash flow of AED 544 million in Q1 2023.
Highlights from the start of the year were the announcement of the acquisition of 100% ownership of TTEK, a developer of border control solutions and customs systems, and the completion of the merger with Abu Dhabi’s EAJ.
buy
The group is now focused on completing the previously announced 100% acquisition of Noatum, a logistics service provider with operations in 26 countries across five continents, and acquiring an 80% stake in Dubai-based Global Feeder Shipping (GFS), The latter is a global container shipping company.
The acquisitions will expand AD Ports Group’s global footprint, expand its international logistics and freight forwarding business, and make the company the largest pure-play feeder operator in the region and the third largest operator in container capacity globally, with a container capacity approaching 100,000 standard box. AD Ports Group currently expects to close the acquisition of Noatum no later than the second quarter of 2023 and the acquisition of GFS no later than the third quarter of 2023.
Captain Mohamed Juma Al Shamisi, Managing Director and Group Chief Executive Officer, AD Ports Group, said: “Our successful momentum from 2022 has continued into the first quarter of 2023 with strong financial and operational performance. Our investments in organic growth are paying off. results, and our strategic M&A activity has further fueled our growth.
business flexibility
“The Group’s performance across its five clusters is a testament to our strong business resilience, with over 70% of revenue in Q1 2023 being long-term, sticky and recurring business.
“We expect our growth trajectory to continue as we advance our 5-year capital expenditure plan (2023-27) of approximately AED 15 billion and further expand our capabilities and market presence with the support of our wise leadership Going forward, especially since the macroeconomic outlook for the UAE and the region remains positive.”
Martin Aarup, Group Chief Financial Officer, AD Ports Group, said: “Our financial performance for the first quarter of 2023 was strong, with strong revenue growth and a solid and predictable revenue base. Unique business models in economic cities and free zone clusters, as well as long-term contracts, partnerships and leases in maritime and logistics clusters.
“Additionally, our strong balance sheet provides greater flexibility for both organic and inorganic growth, allowing us to continue to consider business growth opportunities in the current challenging environment while maintaining our investment-grade credit rating. We are confident about the future excited about the opportunity and remain committed to delivering increasing value to our shareholders.” — trade arab news agency
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