AD Ports Group on Wednesday announced that its annual revenues climbed 41 per cent year-on-year basis to Dh5.5 billion in 2022 due to strong performance of its maritime and ports clusters as well as acquisitions and new partnerships.
In a statement, the Abu Dhabi-based group said its earnings before interest, taxes, depreciation and amortisation (EBITDA) surged 37 per cent to Dh2.2 billion in 2022. The EBITDA rose 24 per cent to Dh546 million in fourth quarter.
"Organically, Ebitda grew by 27 per cent to Dh2 billion while Ebitda margin stood at 39.8 per cent in 2022 as well as 31 per cent in fourth quarter," the statement said.
The group also recorded 53 per cent year-on-year increase in its net profit to Dh1.3 billion while in fourth quarter net profit surged 42 per cent to Dh365 million. Earnings per share (EPS) increased to Dh0.26 for the full year in 2022, up from Dh0.22 in 2021.
Operating cash flow amounted to Dh1.6 billion in 2022, implying a cash conversion of 74 per cent. About Dh5.6 billion was spent on organic growth-oriented capital expenditure (CapEx) in 2022, as the group continued to press ahead with its organic capital investment plans.
Free cash flow remained negative at Dh4.5 billion due to the front-loaded nature of the ongoing CapEx programme, but also due to acquisitions and investments.
Operationally, in the ports cluster, container throughput grew to 4.33 million twenty-foot equivalent units (TEUs) in 2022, reflecting a growth of 28 per cent.
In fourth quarter, it registered 27 increase in container throughput to 1.17 million TEUs as utilisation of the two existing container terminals continued to improve — 51 per cent in 2022 compared to 40 per cent in 2021 and 55 per cent in Q4 2022 versus 43 per cent in Q4 2021.
On a like-for-like (LFL) basis, general cargo volumes increased by three per cent to reach 31.7 million tonnes in 2022 compared to 44.6 million tonnes in 2021, which included a one-off sand supply project of 14.7 million tonnes.
Ro-Ro (Roll-on/roll-off) and cruise passenger volumes also rebounded strongly on the back of the abated effect of the Covid-19 pandemic.
In the economic cities and free zones (EC&FZ) cluster, 4.2sqkm of new leases (net) were signed in 2022.
In the maritime cluster, all operational indicators – vessel fleet, port calls, container feedering volumes, transhipment volumes, marine services activities – recorded strong growth.
In the logistics cluster, the key highlight in Q4 2022 was the acquisition announcement of 100 per cent ownership of Noatum, a logistics services provider with presence in 26 countries across five continents, for an enterprise value of €660 million. The value and earnings through acquisition, will, upon completion, significantly broaden AD Ports Group’s global footprint and position it among the leading logistics and freight forwarding companies in the world.
Another key highlight in Q4 2022 was the acquisition announcement of an 80 per cent equity stake in Dubai-based Global Feeder Shipping (GFS), a global container shipping company, for an enterprise value of Dh2.9 billion ($800 million).
GFS is the third largest feeder shipping business globally, operating a comprehensive service network of 20 services across the GCC, Red Sea, Indian subcontinent and Southeast Asia regions. Upon completion, the acquisition is set to position AD Ports Group as the largest pure feeder operator in the region and the third largest globally by container capacity, which will be close to 100,000 TEUs.
In September 2022, AD Ports Group also completed the acquisition of a 70 per cent stake in International Associated Cargo Carrier (IACC) in Egypt, which fully owns Transmar and TCI, for an enterprise value of Dh514 million ($140 million).
In total, the group inked seven mergers and acquisitions (M&A) transactions in 2022, totalling Dh5.9 billion, with GFS, Noatum, and Eskan Al Jamae yet to be completed.
In terms of financial performance, the EC&FZ cluster’s revenue increased six per cent to reach Dh1.658 billion in 2022, benefiting from previously signed land leases, higher utilities revenues, strong momentum in warehouses revenues, as well as positive revenue effect of previous contingent asset related to leases out of Razeen worker residential cities for Covid-19 isolation and quarantine purposes.
Overall revenue for the ports cluster grew by seven per cent to Dh1.135 billion, backed by a healthy product mix as well as revenues from the acquisition of TCI, one of the two entities under IACC, Egypt.
Double-digit growth in concession fees and leases as well as the strong rebound in the Ro-Ro and Cruise businesses more than offset the decline in general cargo revenues, which significantly benefited from the sand supply contract in 2021.
On a like-for-like (LFL) basis, ports cluster revenue grew by 21 per cent when adjusted for both the sand supply project and the TCI acquisition.
The transformative impact of the company’s acquisition strategy can be seen most clearly in the exponential increase in the contribution of the Maritime Cluster to the group’s revenue — the largest revenue contributor with 37 per cent of total revenue and second largest EBITDA contributor with 24 per cent of total EBITDA.
The Maritime Cluster’s revenue growth of 256 per cent in 2022 to Dh2.161 billion (+282 per cent in Q4 2022) was driven by a wider service offering and increased activity in new business segments, including feedering, chartering, transshipment, and offshore services.
The maritime cluster added four new companies to its portfolio in 2022: Divetech Marine Engineering Services, Alligator Shipping Container Line, Transmar, one of the two entities part of IACC-Egypt, and SAFEEN Surveys and Subsea Services. These new businesses contributed to revenue and EBITDA with Dh689 million and Dh150 million in 2022, respectively, and are expected to continue to support the cluster’s growth going forward.
The logistics cluster registered a 12 per cent year-on-year revenue decline to Dh532 million in 2022 mainly due to the reduction in the vaccine business with the easing of the Covid-19 pandemic, the revision of a contract with a key client from a short-term asset heavy to a longer-term asset light model, as well as temporary lower volumes due to the non-availability of empty containers for exports.
Revenue of the digital cluster grew by 11 per cent to Dh400 million in 2022, driven by development progress of various technology-led solutions.
Captain Mohamed Juma Al Shamisi, managing director and group CEO, AD Ports Group, said 2022 was an exceptional year for AD Ports Group with strong results reflecting the effectiveness of our ambitious growth strategy, and the focus on delivering on our promises to our shareholders and stakeholders.
"The group’s remarkable financial and operational performance was driven by our maritime and ports clusters’ results, coupled with strategic investments, new joint ventures, partnerships and acquisitions that enabled us to expand our geographic footprint, our services and offerings as well as enhance our position as a major player in global trade and logistics," he said. "For 2023, we will be focusing on maximising returns and generating portfolio synergies, while providing our customers with superior end to end supply chain outcomes,” he said.
Martin Aarup, group chief financial officer, AD Ports Group, said: “We are pleased to have achieved an exceptional performance during 2022 by continuing to press ahead with our ambitious organic revenue-generating CapEx programme of around Dh15 billion over the next five years, with spending of Dh1.4 billion in Q4 2022 and Dh5.6 billion for the full year in 2022, and by accelerating the pace of M&A transactions, with seven of them completed or announced last year."
Ross Thompson, group chief strategy and growth officer, AD Ports Group, said 2022 has been a banner year for AD Ports Group.
"Despite the global geopolitical and economic headwinds, we continued to build on our foundation in Abu Dhabi by investing in creating assets, routes and expanding our service offerings," he said.
"At the regional level, our ports and maritime expansion has been asset- and network-led. Our ambitious strategy, not only positioned us for local and regional growth, but also expanded our reach globally with a key focus on our key trading regions, countries, and routes,” he said.
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