Abu Dhabi August 4 2023: ADNOC Logistics and Services (ADNOC L&S), a global energy maritime logistics leader, today announced its financial results for the first half of 2023 (H1 2023), marking its maiden earnings report since its record-breaking IPO in June 2023 on the ADX exchange.
In the first half of 2023, ADNOC L&S recorded a net profit of US$307 million, or US$0.04 or AED0.15 per share, representing a more-than fourfold increase compared to the net profit of US$72 million recorded in H1 2022.
The Company recorded revenues of US$1,225 million in the first half of 2023, marking an increase of 62 percent compared to the first half of 2022. This increase was driven by revenue growth across the Company’s three business segments: Integrated Logistics, Shipping, and Marine Services.
The Company reported an EBITDA of US$417 million in the first half of 2023, representing a 188 percent year-on-year (YoY) increase. This was driven by a higher contribution from all three business segments. This translated into an EBITDA margin of 34.1 percent in the first half of 2023, substantially higher than the EBITDA margin of 19.2 percent in the first half of 2022.
ADNOC L&S delivered a positive free cash flow of US$82 million in the first half of 2023. The Company had no debt financing drawn by 30th June 2023, strategically positioning itself for the implementation of its announced smart growth strategy.
Commenting on the Company’s strong maiden results, Captain Abdulkareem Al Masabi, CEO of ADNOC L&S, said, “Following our record-breaking IPO, ADNOC L&S has delivered exceptionally strong financial results for the first half of 2023 with a 327 percent growth in net profit over the same period from last year. This impressive performance is driven by our responsible plans to expand our asset and customer base, decarbonise our operations and enter new verticals in a timely manner, while strategically positioning ADNOC L&S to capitalise on ADNOC’s ambitious growth strategy. As part of our smart growth strategy, we remain focused on extending our geographical footprint, exploring new revenue streams, and unlocking further value for our shareholders.”
Segment-wise Financial Performances
ADNOC L&S’ Integrated Logistics segment reported revenues of US$729 million in the first half of 2023, an increase of 136 percent YoY following the successful acquisition of Zakher Marine International (ZMI) and expanding its Integrated Logistics service offering.
Integrated Logistics reported EBITDA of US$232 million in the first half of 2023, an increase of 519 percent YoY. The EBITDA margins in H1 2023 showed significant improvement, reaching 31.8 percent compared to 12.1 percent achieved in H1 2022.
The Company’s Shipping segment reported revenues of US$408 million in the first half of 2023, an increase of 9 percent YoY primarily driven by higher charter rates and increased vessel days for Tanker and Gas Carriers. This growth was partially offset by a lower contribution from Dry-bulk shipping due to reduced charter rates.
Shipping reported EBITDA of US$168 million in the first half of 2023, reflecting an increase of 61 percent YoY. EBITDA was further supported by a 7 percent reduction in direct costs during the first half of 2023. This translated into delivered EBITDA margins of 41.2 percent in H1 2023, significantly higher than 28 percent in H1 2022.
The Marine Services segment reported revenues of US$88 million in the first half of 2023, an increase of 19 percent YoY. Marine Services reported an EBITDA of US$17 million in the first half of 2023, an increase of 70 percent YoY. EBITDA margins of 19 percent in H1 2023 were significantly higher than 14 percent in H1 2022.
Strategic Update
ADNOC L&S continues to make significant strides in executing its smart growth strategy by expanding into new business verticals, creating fresh revenue streams, and continuing to strategically expand its fleet. During Q2 2023, the Company secured a US$975 million Engineering, Procurement and Construction (EPC) contract from ADNOC Offshore for the construction of an offshore artificial island. The provision of EPC services in the integrated logistics sector is a new offering by ADNOC L&S, aligned with the Company’s smart growth strategy, enabling it to generate fresh revenue streams by expanding into new business areas.
In addition, ADNOC L&S took the delivery of two of the four newbuild, LNG dual-fuel Very Large Crude Carriers (VLCCs) schedued to be delivered this year as part of its strategic fleet expansion. These vessels are categorised as one of the most environmentally efficient in operation today as a result of their dual-fuel engine that is also designed to run on lower emitting Liquified Natural Gas (LNG). ADNOC L&S has committed approximately US$2 billion to building more environmentally efficient vessels and has successfully reduced the carbon intensity of its owned fleet by more than 20 percent between 2018 and 2022.
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