Adnoc L&S posts 31% increase in net profit during H1 of 2024

Adnoc Logistics and Services on Wednesday announced its second quarter and first half 2024 financial results. During H1 2024, Adnoc L&S recorded a net profit of $401 million (Dhs1,473 million), equating to $0.05 (Dhs0.20) per share, an increase of 31% on H1 2023.

The company reported revenues of $1,740 million (Dhs6,390 million), up 42% from H1 2023. EBITDA rose by 42% to $591 million (Dhs2,170 million), driven by robust performance across all business segments, sustaining EBITDA margins at 34%.

The company’s second quarter revenue increased by 42% year-on-year (y-o-y) to $899 million (Dhs3,302 million), with EBITDA growing 40% y-o-y to $306 million (Dhs1,124 million).

Net profit for the second quarter grew 28% y-o-y to $208 million (Dhs764 million).

This strong financial growth was driven by the ongoing implementation of Adnoc L&S’ transformational growth strategy whereby the company intends to invest of over $5 billion (Dhs18.4 billion) in value-accretive growth opportunities in energy-related maritime logistics by the end of 2028.

Adnoc L&S has committed over 50% of this strategic investment target one year post its record-breaking IPO, including significant investments against long-term contracted demand.

Commenting on the company’s financial results, Captain Abdulkareem Al Masabi, CEO of Adnoc L&S, said, “The sustained execution of our transformational growth strategy is driving our financial performance across all business segments with strong growth in revenues and net profit. To meet the growing demand for low-carbon energy sources in the UAE and beyond, we have continued to expand our market-leading fleet through significant new energy-efficient vessel construction contracts and geographical expansion through our acquisition of Navig8.

“We will continue to target value-accretive investments to serve an increasing global customer base and deliver long-term value to our shareholders.” Revenues from Adnoc L&S’ Integrated Logistics segment increased to $1,132 million (Dhs4,157 million), up 55% on H1 2023.

Revenues from the Shipping segment increased 27% to $519 million (Dhs1,906 million) on H1 2023.

Revenues from the Marine Services segment increased 1% to $89 million (Dhs327 million) compared to H1 2023. This segment generated an EBITDA of $29 million (Dhs107 million), up 64%.

Commenting on the Company’s financial results, Captain Abdulkareem Al Masabi, CEO of Adnoc L&S, said: “Adnoc L&S has delivered another set of exceptional financial results in the second quarter, maintaining our strong momentum throughout the year and building on the robust growth we achieved in 2023. The sustained execution of our transformational growth strategy is driving our financial performance across all business segments with strong growth in revenues and net profit. To meet the growing demand for low-carbon energy sources in the UAE and beyond, we have continued to expand our market-leading fleet through significant new energy-efficient vessel construction contracts and geographical expansion through our acquisition of Navig8. We will continue to target value-accretive investments to serve an increasing global customer base and deliver long-term value to our shareholders.”

ADNOC L&S continues to accelerate the execution of its transformational growth strategy.

The acquisition of Navig8 will expand the Company’s geographic footprint and its diversified fleet by adding 32 owned modern tankers and a presence in 15 cities across five continents. Navig8’s global presence will greatly enhance ADNOC L&S’ international profile as a global energy maritime logistics company and expand its blue-chip customer base in key markets. The acquisition, announced in Q2 2024 and currently subject to customary regulatory approvals, will be immediately value-accretive and is projected to increase earnings per share by at least 20% for ADNOC L&S shareholders. 

The Company awarded South Korean shipyards, Samsung Heavy Industries and Hanwha Ocean, up to $2.5 billion (AED9.2 billion) in shipbuilding contracts for the construction of 8-10 new Liquified Natural Gas (LNG) Carriers. The vessels are expected to be delivered beginning 2028 and will be time chartered to ADNOC Group subsidiaries for a period of 20 years to support the growing export volumes of natural gas as an in-demand and critical, lower-carbon transitional fuel. The new vessels will increase the Company’s fleet of LNG Carriers from 14 to at least 22 vessels.

In Q2 2024, AW Shipping, a strategic joint venture between ADNOC L&S and Wanhua Chemical Group, signed shipbuilding contracts with Jiangnan Shipyard in China priced at approximately $1.9 billion (Dhs7 billion) in aggregate, for the construction of nine Very Large Ethane Carriers (VLECs), priced at approximately $1.4 billion (Dhs5.1 billion) and scheduled to be delivered from 2025 to 2027.