Adnoc L&S reports 327% year-on-year increase in H1 2023 net profit

Adnoc Logistics and Services (Adnoc L&S), a global energy maritime logistics leader, on Thursday announced its financial results for the first half of 2023 (H1 2023), marking its maiden earnings report since its record-breaking IPO in June 2023 on the ADX exchange.

In the first half of 2023, Adnoc L&S recorded a net profit of $307 million, or $0.04 or Dh0.15 per share, representing a more-than fourfold increase compared to the net profit of $72 million recorded in H1 2022.

The company recorded revenues of $1.225 billion in the first half of 2023, marking an increase of 62 per cent compared to the first half of 2022. This increase was driven by revenue growth across the company's three business segments: Integrated Logistics, Shipping, and Marine Services.

The Company reported an EBITDA (Earnings before interest, taxes, depreciation, and amortization) of $417 million in the first half of 2023, representing a 188 percent year-on-year (YoY) increase. This was driven by a higher contribution from all three business segments. This translated into an EBITDA margin of 34.1 per cent in the first half of 2023, substantially higher than the EBITDA margin of 19.2 per cent in the first half of 2022.

Adnoc L&S delivered a positive free cash flow of $82 million in the first half of 2023. The company had no debt financing drawn by 30th of June 2023, strategically positioning itself for the implementation of its announced smart growth strategy.

Commenting on the company's strong maiden results, Captain Abdulkareem Al Masabi, CEO of Adnoc L&S, said: "Following our record-breaking IPO, Adnoc L&S has delivered exceptionally strong financial results for the first half of 2023 with a 327 per cent growth in net profit over the same period from last year. This impressive performance is driven by our responsible plans to expand our asset and customer base, decarbonise our operations and enter new verticals in a timely manner, while strategically positioning Adnoc L&S to capitalise on Adnoc's ambitious growth strategy. As part of our smart growth strategy, we remain focused on extending our geographical footprint, exploring new revenue streams, and unlocking further value for our shareholders."

The company's Shipping segment reported revenues of $408 million in the first half of 2023, an increase of 9 per cent YoY primarily driven by higher charter rates and increased vessel days for Tanker and Gas Carriers. This growth was partially offset by a lower contribution from Dry-bulk shipping due to reduced charter rates.

Shipping reported EBITDA of $168 million in the first half of 2023, reflecting an increase of 61 percent YoY. EBITDA was further supported by a 7 per cent reduction in direct costs during the first half of 2023. This translated into delivered EBITDA margins of 41.2 percent in H1 2023, significantly higher than 28 percent in H1 2022.