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Adnoc L&S nine-month net profit up 27% year on year

Company announced interim 2024 dividend of $136.5 million

Adnoc Logistics and Services plc (Adnoc L&S) on Thursday reported a revenue of $2.66 billion (Dh979 billion) for the first nine months of 2024, up 38 per cent compared to the first nine months of 2023.

Earnings before tax, finance costs, finance income, depreciation and amortisation (Ebitda) rose by 37 per cent to $867 million in the same period driven by robust performance across all business segments, sustaining Ebitda margins at 32 per cent. Net profit for the first nine months of 2024 was $576 million, equating to $0.08 (Dh0.29) per share, an increase of 27 per cent comparing to the first nine months 2023.

The Company’s Q3 revenue increased by 32 per cent year on year to $928 million with Ebitda up by 26 per cent year on year to $275 million. Net profit for Q3 grew 18 per cent year on year to $175 million. This strong financial performance is a result of the continuous execution of Adnoc L&S’ transformative growth strategy, focused on value-accretive investments in energy-related maritime logistics.

Captain Abdulkareem Al Masabi, CEO of Adnoc L&S, said: “These robust financial results demonstrate continued delivery of our strategy and our focus on delivering strong shareholder value through growth. The expected contribution of Navig8 will further boost our profile as a global energy maritime logistics company, while our strong balance sheet provides for further organic and inorganic value-accretive growth opportunities.”

Revenues from Adnoc L&S’ Integrated Logistics segment increased to $1.67 billion, up 51 per cent on the first nine months of 2023. This growth was driven by the improved utilisation of Jack-Up Barges (JUBs) coupled with the expanded fleet; higher logistics volumes; accelerated Hail & Ghasha project delivery; and engineering, procurement and construction (EPC) project progress, in particular the contribution of the G-Island project (expected to be 70-75 per cent complete by year-end). Integrated Logistics Ebitda rose by 38 per cent to $505 million for the first nine months of 2024 against the comparable period in 2023.

Revenues from the shipping segment increased 23 per cent to $745 million for the first nine months, driven by strong charter rates for tankers and dry bulk, coupled with additional revenue from the four new very large crude carriers (VLCCs) acquired in 2023. This was slightly offset by a reduction in profits from gas carriers due to cessation of spot charter-in operations and technical offhire days in Q1 2024.

Shipping Ebitda increased 32 per cent to $316 million (Dh1,159 million) from the first nine months 2023, contributing to a three-percentage point expansion in Ebitda margin to 42 per cent.

Revenues from the services segment increased 20 per cent to $252 million (Dh924 million) compared to the first nine months 2023. This segment generated an Ebitda of $46 million (Dh168 million), up 48 per cent, mainly powered by increased volumes in petroleum port and onshore terminal operations.

Outlook

The company raised its medium-term investment guidance to include an incremental $3 billion+, and maintained its 2024 and medium-term profit and loss outlook.

Adnoc L&S expects annual revenue growth in the low- to mid-30 per cent range in 2024. Over the medium term (2024-2028), the company expects high single-digit year-on-year percentage growth.

Annual Ebitda growth from 2023 to 2024 is expected in the low-30 per cent range. Over the medium term (2024-2028), Adnoc L&S targets average annual Ebitda growth in the mid-teens’ percentage wise.

The company expects annual year-on-year net income growth in the low 20 per cent range into 2024. Over the medium term, it targets average annual net income growth in the low percentage teens.

Adnoc L&S has significantly increased its capital expenditure guidance, anticipating an additional $3 billion+ by 2029, beyond the projects already announced, applying the same investment return criteria.

Its dividend policy remains unchanged with a projected total dividend payable for 2024 of $273 million (5 per cent increase from 2023 annualised dividend), balance 50 per cent for H2 2024 in Q2 2025, subject to approvals.