Bucking the Trend ADNOC L&S Reports 327% Increase in H1 2023 Net Profit

ADNOC Logistics and Services plc (ADNOC L&S), a global energy maritime logistics leader, has announced exceptional financial results for the first half of 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 $307 million, or $0.04 or AED0.15 per share, representing a more-than fourfold increase compared to the net profit of $72 million recorded in H1 2022.

The Company recorded revenues of $1,225 million in the first half of 2023, marking an increase of 62% 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 $417 million in the first half of 2023, representing a 188% year-on-year (y-o-y) increase. This was driven by a higher contribution from all three business segments.

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This translated into an EBITDA margin of 34.1% in the first half of 2023, substantially higher than the EBITDA margin of 19.2% in the first half of 2022.

ADNOC L&S delivered a positive free cash flow of $82 million in the first half of 2023. The Company had no debt financing drawn by 30 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% 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, decarbonize our operations and enter new verticals in a timely manner, while strategically positioning ADNOC L&S to capitalize 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 $729 million in the first half of 2023, an increase of 136% y-o-y following the successful acquisition of Zakher Marine International (ZMI) and expanding its Integrated Logistics service offering.

Integrated Logistics reported EBITDA of $232 million in the first half of 2023, an increase of 519% y-o-y. The EBITDA margins in H1 2023 showed significant improvement, reaching 31.8% compared to 12.1% achieved in H1 2022.

The Company’s Shipping segment reported revenues of $408 million in the first half of 2023, an increase of 9% y-o-y primarily driven by higher charter rates and increased vessel days for Tanker and Gas Carriers.

The Marine Services segment reported revenues of $88 million in the first half of 2023, an increase of 19% y-o-y.

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 $975 million Engineering, Procurement and Construction (EPC) contract from ADNOC Offshore for the construction of an offshore artificial island.

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.

ADNOC L&S has committed approximately $2 billion to building more environmentally efficient vessels and has successfully reduced the carbon intensity of its owned fleet by more than 20% between 2018 and 2022.

Read More: ADNOC L&S Expands Shipping Fleet with Five Very Large Gas Carriers