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Adnoc IPO: Abu Dhabi-based company announces intention to float 15% stake in logistics, services division

Offering is expected to open on May 16, subject to regulatory approvals and other relevant considerations

Published: Wed 10 May 2023, 9:15 AM

Updated: Wed 10 May 2023, 8:27 PM

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Adnoc has announced its intention to float a 15% minority stake in Adnoc Logistics & Services (Adnoc L&S), its mission-critical global energy maritime and integrated logistics leader, on the Abu Dhabi Securities Exchange (ADX).

The offering is expected to open on May 16, 2023, subject to regulatory approvals and other relevant considerations.

Adnoc L&S is a vital logistics services provider to Adnoc Group, offering critical and highly-specialised services across the energy value chain.

With a world-scale operating platform, the company has one of the largest and most diverse shipping fleets in the region, is among the largest operator and owner of self-propelled Jack-up barges, operates one of the largest integrated energy supply bases in the UAE, and provides shipping, end-to-end logistics and marine services to its customers.

Commenting on the launch of the IPO process, Khaled Al Zaabi, Group Chief Financial Officer of Adnoc, said, "We are very pleased to announce our intention to float a minority stake in Adnoc L&S, our leading energy logistics and maritime services provider. As the sixth company Adnoc is bringing to market, Adnoc L&S is ideally placed to drive performance, deliver value, and capitalise on both Adnoc ambitious growth roadmap and the growing global demand for lower-carbon, reliable energy supplies.

"The planned offering marks another important milestone for Adnoc and the UAE and cements Adnoc's role as a catalyst to further grow and diversify Abu Dhabi's buoyant capital market. As a sustainability champion within the maritime and logistics sector, Adnoc L&S will play a crucial role in driving the decarbonisation of the UAE maritime sector, yet again offering investors a highly compelling investment proposition with exciting growth prospects."

Adnoc L&S' fleet and assets help ensure the reliable production and transportation of energy worldwide, leveraging the UAE's maritime heritage to enhance the country's status in the global shipping and logistics industry.

In addition to its anchor customer, Adnoc Group, the Company services over 100 global customers and ships to more than 50 countries, utilising a fleet of more than 500 modern and advanced vessels, including 245 owned vessels.

Adnoc L&S is also a sustainability champion for the UAE's marine and logistics ecosystem and targets reducing the carbon intensity per transport by 40% by 2030, compared to 2008.

Captain Abdulkareem Al Masabi, Chief Executive Officer of Adnoc L&S, stated, "Adnoc L&S is a vital component of the UAE's energy ecosystem, providing mission-critical logistics infrastructure and services for the global transfer of energy commodities to customers around the world. Through our specialised business segments of end-to-end logistics, shipping, and marine services, we provide cost-competitive and sustainable solutions for the logistics and maritime energy sector.

"Our planned IPO offers an exciting opportunity to accelerate our growth, supporting Adnoc Group with its ambitious growth strategy, while further expanding the services provided to our customers and exploring new geographical areas and business verticals. With high cash flow visibility, a world class asset base, and an experienced management team supported by a highly dedicated workforce, Adnoc L&S is poised for significant growth, and set to continue delivering strong financial and operational performance, while promoting the UAE and Adnoc's energy transition and decarbonisation agenda."

The combination of a successful track record of delivering organic and inorganic growth, operational excellence and robust cost discipline has enabled Adnoc L&S to achieve strong and profitable financial results.

On an unaudited pro forma basis and reflecting the acquisition of Zakher Marine International (ZMI Holdings) in 2022, the Company's revenue and Adjusted EBITDA for the year ended 31 December 2022 was $2.3 billion and $599.3 million, respectively, with revenue having increased at a compound annual growth rate of more than 20% from 2017 to 2022.

The company's strategy for continued growth is underpinned by a $4-5 billion growth capital expenditure program in the medium term that will focus on expanding the scope of services provided to Adnoc Group companies, while continuing to focus on decarbonisation efforts that support the energy transition in the UAE.

At the same time, Adnoc L&S is committed to expanding relationships with, and the scope of services provided to, existing and new customers, both in shipping and through the expansion of its integrated logistics services platform. While enlarging its geographic footprint and the scale of its operations, the Company is also actively exploring entry into new business verticals.

Adnoc L&S targets payment of dividends of $260 million in respect of the year ended 31 December 2023, of which $65 million is expected to be paid in October 2023, and a further $130 million is expected to be paid in April 2024. Thereafter, the Company expects to increase the dividend per share at a rate of more than 5% annual growth over the medium term.

Details of the offering will be included in an Arabic-language prospectus (the UAE Prospectus) and public subscription announcement (the Public Announcement) and an English-language International Offering Memorandum. Further information can be found at: https://adnoc.ae/en/adnocls-ipo.

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