AD Ports Group revenue up 73% YoY to Dhs1,817 million in the Q1
- 16 May 2023
AD Ports Group said its revenue grew 73 per cent year-on-year (YoY) to Dhs1,817 million in the first quarter (Q1) of 2023. In a statement, the Group said the growth is driven by the robust performance of its Maritime, Economic Cities & Free Zones, and Ports Clusters as well as the acquisitions made in 2022 and Q1 of 2023 - Transmar & TCI in Egypt as well as Divetech, ASCL, SAFEEN Subsea, and Al Eskan Al Jamae (EAJ) in Abu Dhabi.
Ebitda increased 33 per cent YoY to Dhs699 million in Q1 of 2023 driven by the Maritime and Ports Clusters as well as acquisitions, implying an Ebitda margin of 38.5 per cent for the quarter, in line with the short-term guidance of 35-40 per cent communicated to the market.
Total net profit soared 18 per cent YoY to Dhs363 million in Q1 of 2023. The Maritime Cluster reported revenue growth of 259 per cent YoY to Dhs915 million in Q1 of 2023, on a combination of capacity increases, wider service offerings and increased activity in new business segments.
Contribution from new acquisitions - Divetech, ASCL, Safeen Subsea and Transmar - accounted for 30 per cent of total Q1 2023 Maritime Cluster revenue. Key business segments driving growth in the Maritime Cluster were marine, feeder (container and bulk), and offshore services.
The Economic Cities & Free Zones Cluster reported top-line growth of 13 per cent YoY to Dhs429 million in Q1 2023, driven by previously signed leases, higher utilities revenues, and the merger with EAJ, whose contribution (full Q1) amounted to around Dhs73 million.
The Economic Cities & Free Zones Cluster leased an additional 1.4 sq km of land in Q1 of 2023, on track to achieve the 3.5-4.0 sq km annual guidance and reported an increase in warehouse leases of 46 per cent YoY. The Ports Cluster reported revenue growth of 24 per cent YoY to Dhs314 million in Q1 of 2023.
Ports Cluster container volumes grew 18 per cent YoY in Q1 of 2023, driven by the gradual recovery from COVID-19 and supply chain disruptions as well as higher container utilisation rates (51 per cent in Q1 of 2023 vs. 43 per cent in Q1 of 2022) as partner shipping lines are gradually shifting their regional volumes to Khalifa Port in line with their contractual obligations.
The Ports Cluster also achieved 32 per cent YoY growth in Ro-Ro volumes, 361 per cent YoY growth in cruise passengers, and 40 per cent YoY growth in general cargo volumes.
The Logistics Cluster contributed Dhs139 million to the Group’s revenue in Q1 of 2023, declining 3 per cent YoY, as its performance was impacted by the temporary maintenance shutdown of a strategic customer’s production plant and the end of the COVID-19 vaccine business.
The Digital Cluster contributed Dhs101 million to the Group’s top line in Q1 of 2023, relatively stable, as its performance was impacted by lower demand for internal IT services. AD Ports Group continued to press ahead with its ambitious revenue-generating CapEx programme to diversify its income as per plan, spending Dhs1.02 billion in Q1 of 2023.
On the balance sheet front, AD Ports Group maintained a healthy financial position and leverage, with Net Debt to Ebitda ratio standing at 2.1x at the end of the Q1 of 2023 and limited debt servicing obligations in the short term.As for cash flows, the Group generated Net Operating Cash Flows of Dhs335 million in Q1 of 2023, significantly up YoY.
The heavy and front-loaded CapEx programme continued to weigh on Free Cash Flows as per plan, resulting in a negative Free Cash Flow of Dhs544 million during Q1 2023. One of the key highlights since the beginning of the year was the announcement of the acquisition of 100 per cent ownership of TTEK, a developer of border control solutions and customs systems, in addition to the completion of the merger with EAJ in Abu Dhabi.
The Group is now focusing on completing the previously announced acquisitions of 100 per cent of Noatum, a logistics services provider with a presence in 26 countries across five continents, and 80 per cent equity stake in Dubai-based Global Feeder Shipping (GFS), a global container shipping company.
These acquisitions will broaden AD Ports Group’s global footprint and scale up its logistics and freight forwarding business internationally and turn the company into the largest pure feeder operator in the region and the third largest globally by container capacity, which will be close to 100,000 TEUs.