AD Ports Group has reported Dhs1.36 billion in net profit for 2023, up 6% Year-on-Year (YoY). This came as the leading global facilitator of logistics, industry and trade, recently announced its preliminary financial results for the 12 months ending 31st December 2023, reporting strong operational and financial performance, with revenue more than doubling year-on-year to Dhs11.68 billion, +58% YoY to Dhs8.71 billion on a like-for-like (LFL) basis after adjusting for the effect of mergers and acquisitions (M&A).

Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO, AD Ports Group, said: “Navigating the continually evolving, and at times unpredictable, landscape of global trade, our strategic investments have positioned AD Ports Group at the forefront of innovation and growth. Our focus on expanding our infrastructure and enhancing operational efficiencies continue to set a new benchmark for excellence in the maritime and logistics sector.

This steadfast approach, guided by the vision of the UAE’s wise leaders, has led us to contribute significantly to the economic diversification and industrial advancement of our nation.” Revenue growth was driven by the Maritime & Shipping, Ports, Logistics, and Digital Clusters, as well as M&A effect, particularly the completion of the Noatum acquisition on 30th June 2023 (six-month impact), according to a company statement.

The Maritime & Shipping Cluster also booked pass-through vessel trading revenues in Q3 & Q4 2023, with no associated profits. Adjusting for vessel trading activities, Group revenue would have increased by 77% YoY in 2023 (+23% YoY on a LFL basis).

EBITDA was impacted by a notable non-cash exceptional one-off impairment charge of Dhs139 million related to an investment in a listed associate in Q4 2023. Adjusting for the negative impact of this one-off, EBITDA would have increased by 29% YoY in 2023.

Despite strong top-line and operating results, higher depreciation and amortisation charges, including amortization of intangibles following the finalisation of the purchase price allocation process of recent acquisitions, as well as finance costs and tax weighed on total net profit performance.

Revenues and profits associated with organic and inorganic investments made in 2023 have not yet been fully reflected in the Group’s financial performance due to (i) the long-term nature and required operational ramp-up of organic investments, and (ii) the need for a longer period to extract full synergies from acquired assets.

Normalisation of interest rates going forward will also help narrow the gap between top-line and bottom-line growth.

Operationally, the Ports Cluster saw container throughput grow to 4.91 million Twenty-foot Equivalent Units (TEUs) in 2023, +13% YoY (+7% YoY to 1.25 million TEUs in Q4 2023), driven by higher overall utilisation of 54% in 2023 compared to 51% in 2022, and 58% versus 55% at Khalifa Port specifically. On an LFL basis, container volumes grew 5% YoY.

General cargo volumes rose by 26% YoY to reach 40.0 million tonnes in 2023, compared with 31.7 million tonnes in 2022 (+13% YoY on an LFL basis).

Ro-Ro volumes jumped almost fourfold YoY to 777,000 vehicles, capturing six months of Noatum’s volumes (+48% YoY on an LFL basis), while cruise passenger volumes soared 183% YoY despite the Red Sea disruptions impacting operations at the Aqaba Cruise Terminal in Q4 2023 (accounting for 11% of total cruise volumes in 2023).

In the Economic Cities & Free Zones (EC&FZ) Cluster, 5.0 sq km of gross new leases were signed in 2023 (2.9 sq km on a net basis). Occupancy in KEZAD Communities continued to improve, reaching 60%, up from 43% at the end of 2022, and the demand for gas remained strong, with gas volumes increasing 12% YoY.

In the Maritime & Shipping Cluster, all operational indicators recorded strong growth in 2023. The total vessel fleet reached 226, up from 178 in 2022, adding capacity across all shipping segments (container, dry & liquid bulk, offshore & subsea, Ro-Ro, and multipurpose); feedering container port calls increased by 34% YoY; feedering container volumes soared 70% YoY to 525,000 TEUs; and marine services activities (vessel calls, towing services, pilot services) all experienced double-digit growth YoY.

In the Logistics Cluster, polymer volumes increased 4% YoY, while global ocean and air freight forwarding volumes increased 8% YoY and declined 25% YoY, respectively, in the context of a challenging environment characterised by softer demand and normalizing freight rates.

In the Digital Cluster, single-window transactions exceeded 33 million, including strong E-Pass volumes for port access while foreign labour services (FLS) transactions and maintenance and services activities related to external projects also supported the performance of the Cluster.