Boon for Adnoc L&S as quarterly profit up 89% on logistics business growth

Adnoc Logistics and Services reported an 89 per cent increase in its fourth-quarter profit, boosted by higher demand in the company’s integrated logistics business.

Net profit for the three months that ended in December rose to $165 million, the company said, in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Adnoc L&S’ revenue jumped by an annual 26 per cent to $828 million in the period.

Capt Abdulkareem Al Masabi, chief executive of Adnoc L&S, said the company’s “strong balance sheet and cash position” would open up new growth opportunities.

“We remain confident in our medium-term guidance and the potential to further strengthen our position as a global energy maritime logistics leader,” Mr Al Masabi said.

The company’s board has recommended a cash dividend of $130 million, or 6.45 fils a share, for the second half of 2023, which will be paid in the second quarter of this year after shareholder approval, Adnoc L&S said.

Adnoc’s maritime logistics arm aims to increase annual dividends by at least 5 per cent over the medium term, taking the 2023 annual dividend of $260 million as a base, it said.

For the full year 2023, Adnoc L&S’ net profit rose by about 140 per cent to $620 million while revenue surged 41 per cent to $2.76 billion.

Revenue from the company’s integrated logistics segment increased 88 per cent to $1.74 billion last year, helped by continued growth in revenue and margins on core business lines, as well as the acquisition of ZMI Holdings.

The company said it was aiming for “high teens” percentage growth in revenue for 2024 and “mid-to-high single-digit” percentage growth annually in the medium term.

In terms of earnings before interest, taxes, depreciation, and amortisation, Adnoc L&S hopes to record average annual growth in the “low teens” over the medium term.

Adnoc L&S delivers energy products to more than 100 customers in about 50 countries through its three business units.

The company made its debut on the Abu Dhabi bourse in June 2023 after parent company Adnoc raised about Dh2.83 billion from the 19 per cent stake sale in the subsidiary.

In 2023, Adnoc L&S unveiled its global Integrated Logistics Services Platform (ILSP), among the largest turnkey offshore logistics offerings in the world, the company said.

Adnoc L&S bought ZMI, an Abu Dhabi company that owns and operates offshore support vessels, in July 2022.