AD Ports Group maintains a robust capital structure with adequate liquidity and investment grade credit ratings to cater to its future growth.
AD Ports Group announced its financial results for the quarter ended 30 June 2022. The Group’s revenue grew 35% Year-on-Year to Dhs1,242 million in Q2 2022 (+25% YoY growth in H1 2022), achieving record results for H1 growth mainly driven by the Maritime and Economic Cities & Free Zones (EC&FZ) Clusters, and to a lesser extent by the Digital Cluster.
The Ports Cluster Q2 2022 revenue performance was hampered by an unfavourable base effect from the one-off sand supply contract that ran from March until October 2021. However, on a like-for-like (LFL) basis, the Ports Cluster revenue grew by 20% YoY in Q2 2022.
EBITDA increased 41% YoY to Dhs532 million in Q2 2022 (+37% YoY growth in H1 2022), with EBITDA margin improving by close to 200 bps to 42.8%. With the continued ramp-up of operations across all clusters, and barring one-off negative impacts, the Group’s EBITDA performance should continue to be supported by higher operating leverage going forward.
Net Profit growth accelerated to 59% YoY reaching Dhs300 million in Q2 2022 (+49% YoY growth in H1 2022) despite higher depreciation charges and higher finance costs from the ongoing investment programme as well as higher provisions for ECL (Expected Credit Loss).
The 22.32% stake in Aramex, which was transferred to AD Ports Group in January 2022, contributed Dhs12 million to EBITDA and Net Profit in Q2 2022 (Dhs 23 million in H1 2022).
Consolidated capital expenditure during Q2 2022 reached Dhs1.6 billion (Dhs2.6 billion in H1 2022 vs. Dhs1.1 billion in H1 2021), with the three main recipients by order of quantum being the Maritime Cluster (vessel fleet expansion), the Ports Cluster (Khalifa Port expansion and Etihad Rail connectivity), and the Economic Cities & Free Zones Cluster (new warehouses, gas network expansion and infrastructure-related investments to unlock additional land).
AD Ports Group maintains a robust capital structure with adequate liquidity and investment grade credit ratings to cater to its future growth. As of Q2 2002, the Group had total debt of Dhs 3.6 billion in the form of 10-year bonds that were issued under an EMTN Programme in 2021 and a cash position of Dhs1.8 billion, translating into a net leverage of 0.9x. The Group has a well-managed debt maturity profile with adequate liquidity lines. The $1 billion syndicated revolving credit facility (RCF) with a consortium of local and international banks secured in 2021 remains unutilised. The strategy continues to be to utilize bonds as the predominant long-term funding vehicle with the RCF serving as a liquidity backstop.
In June 2022, AD Ports Group reached an agreement with National Marine Dredging Company (NMDC) to launch a new JV, SAFEEN Surveys and Subsea Services. The new company will offer offshore surveys and subsea services, including commercial diving services and unmanned vessel inspections, in the UAE, the GCC, and some international markets. In addition, the JV will provide innovative solutions to meet the needs of offshore operations related to the oil and gas and renewable energy sectors.
In the same month, AD Ports Group announced its first international acquisition in Egypt with the purchase of a 70% stake in International Associated Cargo Carrier (IACC), which fully owns Transmar International Shipping Company and Transcargo International (TCI) - a regional container shipping company that operates across the Middle East, Red Sea, Arabian Gulf and Eastern Coast of Africa and a terminal operator and stevedoring company, mainly operating out of the Adabiya Port, where it is the exclusive container operator, respectively.
In July 2022, AD Ports Group launched a joint venture with SEG, one of the largest oil and gas companies in Uzbekistan, to open new logistics and freight businesses and signed a Memorandum of Understanding to develop a food storage and distribution hub to enhance Uzbekistan’s food trade across global markets and drive Central Asian food security.
Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO, AD Ports Group, said: “The momentum of our growth journey has accelerated throughout the first half of the year, and we anticipate continuing to deliver on our performance for the remainder of the year. We are grateful to our wise leadership for their unwavering support towards our endeavours that seek to drive the economic growth, diversification, and industrialisation of the UAE. The Group’s core businesses have continued to rebound from the severe supply chain disruptions of last year while our new ventures, enhanced service offering, and diversification strategy into synergistic new businesses have been yielding positive results.
In Q2 2022, we continued to invest heavily in order to deliver future growth. Moreover, we have also benefitted from the macro picture in the Gulf region, and in the UAE in particular. Not only have oil prices been increasing sharply, which has accelerated the country’s economic growth.