Adnoc L&S takes delivery of first new-build LNG carrier from China

 Adnoc Logistics and Services (Adnco L&S) announced on Monday it has taken delivery of 'Al Shelila,' the first of six new-build Liquified Natural Gas (LNG) carriers from Jiangnan Shipyard in China.
The vessel has been delivered two months ahead of schedule, with the remaining five expected to be delivered in 2025 and 2026. Immediately after delivery, "Al Shelila" will go on hire with a top-tier, global energy trader.

Al Shelila's naming and delivery ceremony was attended by Muhannad Sulaiman Al Naqbi, UAE Consul-General in Shanghai, Captain Abdulkareem Al Masabi, CEO of Adnoc L&S, Lin Ou, Chairman of Jiangnan Shipyard, Tony Liang, General Manager, Wanhua Chemical Group, Rong Yao of CSTC, Norbert Kray of DNV and Sebastien Fatet of GTT.

Al Masabi said, "As we expand our fleet to meet rising global demand for natural gas, our deepening partnership with Jiangnan Shipyard underscores the strong industrial ties between the UAE and China, reinforcing our shared commitment to powering global economic growth."

Adnoc L&S awarded shipbuilding contracts to Jiangnan Shipyard in 2022 for the six LNG carriers as part of the Company's strategic fleet expansion to meet the growing global demand for natural gas as a lower-carbon energy source.

During 2024, the Company further strengthened and modernised its asset base with new build contracts for up to 23 new energy-efficient vessels, including 8-10 LNG carriers, nine Very Large Ethane Carriers (VLECs) and four Very Large Ammonia Carriers (VLACs), adding in excess of 340 years of contracted income year-to-date.

In addition, the Navig8 acquisition is progressing well through regulatory approvals, with completion anticipated by 31st March 2025 at the latest. The expected contribution of the acquisition will further boost Adnoc L&S' profile as a global energy maritime logistics leader.

Lin Ou commented, "Under the great trust and support of Adnoc L&S, DNV, GTT and all relevant parties, Jiangnan has completed the construction of the first Mark III type large LNG carrier two months ahead of schedule. As a global leading shipbuilding company specialised in the full series of gas carriers, Jiangnan has demonstrated its comprehensive shipbuilding ability again. We are committed to delivering the remaining LNG carriers, VLECs and VLACs on time to support Adnoc L&S in its ambitious fleet expansion, and further strengthen our strategic cooperation."

Al Shelila has a capacity of 175,000m3, significantly larger than the 137,000m3 capacity of Adnoc L&S' current LNG carriers. Equipped with advanced energy-efficient technologies, including two new-generation LNG dual-fuel main engines, the vessel is designed to reduce methane emissions by up to 50 per cent compared to older-generation technology.

The partnership between Adnoc L&S and Jiangnan Shipyard continues to strengthen. In 2020, AW Shipping, the strategic venture between Adnoc L&S and Wanhua Chemical, awarded Jiangnan Shipyard shipbuilding contracts for five Very Large Gas Carriers. This collaboration expanded in 2024 with further contracts for nine VLECs and four VLACs.

Meanwhile Adnoc Logistics and Services plc (Adnoc L&S) 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.
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.