With high double-digit revenue growth across all its clusters, AD Ports Group reported record revenue of AED 4.66 billion ($1.27 billion, up 10 per cent year-on-year) and record profit of AED 445 million ($121.37 million, up 11 per cent YoY) for the third quarter of 2024, ending 30 September.
The Abu Dhabi-based trade, transport and logistics solutions company also turned free cash flow positive for the first time since its IPO (February 2022) on a quarterly basis amidst EBITDA growth acceleration, higher cash conversion, and lower capital expenditure (CapEx) spending. Cash flow from operations more than doubled Quarter-on-Quarter (QoQ) to AED 1.2 billion ($330 million).
A higher cash conversion ratio of close to 100 per cent, combined with a 31 per cent QoQ drop in CapEx, resulted in a positive Free cash flow of AED 307 million ($83.6 million) for the quarter.
Revenue was up 60 per cent when normalised for vessel trading activities booked in Q3 2023. On a Like-For-Like (LFL) basis, adjusted for M&A effect and vessel trading activities, Q3 2024 revenue grew 28 per cent YoY.
EBITDA grew 60 percent to AED 1.21 billion ($330 million) in Q3 2024, and 124 percent normalised for the vessel trading activities in Q3 2023. EBITDA margin improved from 17.9 per cent in Q3 2023 to 26 per cent in Q3 2024. Total assets grew 22 per cent YoY to AED 63.7 billion ($17.35 billion).
Ports revenue grew 24 per cent YoY to AED 603 million ($164.2 million); Maritime & Shipping (normalised for the vessel trading activities in Q3 2024) was up 96 per cent YoY at AED 2,179 million ($593.3 million); the Economic Cities and Free Zones revenue was up 16 per cent to AED 512 million ($139.4 million), while Logistics (AED 1,265 million/$344.45 million) and Digital (AED 162 million/$44.1 million) grew 48 and 62 per cent respectively.
In September, AD Ports Group strengthened its liquidity position by refinancing and upsizing its syndicate loan and Islamic debt facility amounting to a total of AED 8.2 billion into two new facilities for a total of AED 10.2 billion, lowering spreads and extending maturities to 2026 and beyond.
Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO, was optimistic of the company maintaining its growth trend.
Al Shamisi commented: “Our strong third-quarter results, which set records for quarterly revenue and profitability, illustrate once again the robust underlying health of our core businesses and the value-enhancing benefits of AD Ports Group’s ‘intelligent’ internationalisation strategy.
“As 2024 comes to a close, there is reason for optimism. While geopolitical disruptions continue to affect visibility, seaborne trade volumes are still expected to grow 2.2 per cent this year, and by 2 per cent in 2025, according to Clarkson Research. The global economic situation has developed slightly better than expected this year, and the regional macro environment remains solid, supporting demand and rates for AD Ports Group.”
Martin Aarup, Group Chief Financial Officer, added: “Our strong Q3 2024 financial results, in which the Group turned free cash flow positive for the first time on a quarterly basis, provide further corroboration of the accretive growth benefits of our synergistic five-pillar business portfolio, which generated strong growth across the board.
“The group recorded a record quarterly EBITDA of AED 1.21 billion, up 60 per cent year-on-year, and 63 per cent on a like-for-like basis. Our demonstrated restraint on CapEx in Q3 2024, and our near 100 per cent cash conversion rate, are strengths that will continue to drive our profitable growth despite prevailing macroeconomic and geopolitical turbulence.”
Container shipping market outlook
In its outlook for 2025, AD Ports said “visibility on a normalisation of the situation is still poor”, but “the global economic situation has also been slightly better than expected so far this year and regional macro remains solid supporting demand and rates for AD Ports Group”.
The industry-wide disruptions since December 2023, forcing vessels on the main East-West shipping lane to divert and take longer routes around the Cape of Good Hope, are likely to persist in the short-term.
Geopolitical tensions in the Middle East, which arguably have been deteriorating since the beginning of the year, have led to continued attacks on ships in the Red Sea/Gulf of Aden, which in turn have resulted in continued global supply chain disruptions.
AD Ports added “Although we are seeing more operators returning to the Red Sea, the resumption of full-scale operations transiting through the Suez Canal is not yet on the horizon. Shipping giants Maersk, Hapag-Lloyd and COSCO have all recently confirmed they will continue to sail around the Cape of Good Hope up until the end of 2024 and into 2025.”
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