AD Ports Group Delivers Record Q3 2023 Results
2023-11-15 11:18

AD Ports Group Delivers Record Q3 2023 Results

The following release was published by AD Ports Group:

  • Q3 2023 Revenue grew by 189% YoY to AED 4.24 billion, driven by Noatum consolidation as well as the Maritime & Shipping and EC&FZ clusters (+113% YoY on a LFL basis)
  • Q3 2023 EBITDA increased 28% YoY to AED 759 million (+2% on a LFL basis), implying an EBITDA margin of 17.9%
  • Q3 2023 Total Net Profit increased 20% YoY to AED 403 million
  • Continued strong volume growth: +19% YoY for Container volumes, +25% YoY for General Cargo volumes, +651% YoY for Ro-Ro volumes, +30% YoY for Feedering Container volumes, +5% YoY and -28% YoY for Ocean and Air Freight volumes, and +10% YoY for Polymers volumes.
  • In EC&FZ, 0.4 sq km (net) of new land leases were added during the quarter while warehouse leases soared 66% YoY
  • Freight rates normalised close to pre-COVID19 levels in H1 2023 and have been consolidating since then, although better-than-expected global macro data and renewed geopolitical tensions have resulted in pockets of strengths lately.

AD Ports Group today announced its financial results for the third quarter of 2023, reporting revenue growth of 189% YoY to AED 4.24 billion, which included the effect of M&A activity and notably Noatum’s Logistics, Maritime, and Ports businesses. Revenue growth reached 113% YoY on a LFL basis, excluding effect from M&A activity.

Four of the five clusters - Logistics, Maritime & Shipping, Ports, and EC&FZ - were key growth drivers of the top line, with 546%, 264%, 71%, and 20% YoY performance, respectively.

AD Ports Group Q3 2023 EBITDA rose by 28% YoY to AED 759 million, largely supported by the acquisition of Noatum and Karachi Gateway Terminal (+2% YoY on a LFL basis). Higher contributions from the relatively lower-margin Maritime & Shipping and Logistics businesses resulted in further EBITDA margin dilution to 17.9% for the quarter vs. 40.5% in Q3 2022. The Group maintains its EBITDA Margin guidance of 25-30% in the medium term as it expects the revenue mix to continue to rebalance while it continues to invest heavily, both organically and inorganically, in the foreseeable future. The Group also expects its operating profitability to rebalance as it gradually delivers on extracting synergies from densifying our vertically integrated ecosystem and scaling up operations.

The Maritime & Shipping Cluster remained the Group’s biggest revenue contributor and has become the largest EBITDA contributor too, accounting for 56% and 33% in Q3 2023, respectively, benefiting from Noatum Maritime contribution and opportunistic vessel trading activities.

Total Net Profit surged by 20% YoY to AED 403 million in Q3 2023, in line with EBITDA performance.

The Group’s negative Net Operating Cash Flows of AED 579 million were impacted by a temporary deterioration in working capital in relation with the vessel trading activities. The Group expects Net Operating Cash Flows to recoup this negative performance in Q4 2023 when the associated cash collection takes place.

The Group’s Capital Expenditures (CapEx) reached AED 800 million in Q3 2023, putting the total year-to-date outlay at AED 3.65 billion, in line with our front-loaded AED 15 billion capex programme between 2023 and 2027 (five-year period).

Net Debt to EBITDA ratio stood at 4.0x at the end of Q3 2023 for the exact same reasons mentioned above to explain the Net Operating Cash Flows performance, i.e. the temporary impact from vessel trading activities. The Group expects leverage to normalise in the last quarter of the year.

Source: AD Ports Group