ADNOC L&S Achieves 34% Net Profit Increase In Q1 2024 With Strategic Investments

ADNOC Logistics and Services plc (ADNOC L&S) has reported a significant increase in its financial performance for the first quarter of 2024, with a net profit of $194 million (AED712 million), marking a 34% rise from the $145 million (AED533 million) recorded in the same period last year. This growth is attributed to a comprehensive transformational growth strategy, as the company aims to invest over $5 billion (AED18.4 billion) in energy-related maritime logistics to cater to the increasing demand within and beyond the UAE.

The company's revenue saw a 42% increase, reaching $840 million (AED3,085 million) in Q1 2024, compared to Q1 2023. EBITDA also rose by 44% to $286 million (AED1,050 million), reflecting strong performance across all business segments. This upward trend has led ADNOC L&S to revise its guidance upwards, indicating continued growth and expansion.

Captain Abdulkareem Al Masabi, CEO of ADNOC L&S, highlighted the company's robust start to 2024, emphasizing the effectiveness of its strategic investments and the use of AI technologies to enhance operational efficiency, safety, and sustainability goals. The Integrated Logistics segment particularly stood out with a 55% revenue increase to $546 million (AED2,005 million), driven by higher volumes and expanded activities.

The Shipping segment also reported growth, with revenues up by 25% to $251 million (AED922 million), bolstered by strong charter rates and the addition of four new Very Large Crude Carriers (VLCC) to its fleet. Meanwhile, the Marine Services segment grew by 7% to $43 million (AED158 million), with an EBITDA increase of 28%, thanks to higher volumes in petroleum ports operations and a new Marine Terminal Operations contract with ADNOC Offshore.

ADNOC L&S is not only focused on financial growth but also on sustainability, aligning with ADNOC Group's 2045 Net Zero target and the UAE's 2050 Net Zero strategy. The company has made significant strides in reducing carbon emissions intensity and improving energy efficiency across its shipping fleet by 24% since 2020. It has committed approximately $2 billion (AED7 billion) towards building environmentally efficient vessels and has been operating 13 vessels on biofuels since 2020.

In terms of shareholder returns, the company announced a cash dividend distribution of $130 million (AED477 million) for the second half of 2023 at its Annual General Assembly Meeting. This follows a progressive dividend policy aiming for at least a 5% annual increase over the medium term from the 2023 annualised dividend base of $260 million (AED955 million).

ADNOC L&S's Q1 2024 results not only demonstrate its financial resilience but also underscore its commitment to sustainable growth and operational excellence. With strategic investments in technology and sustainability initiatives, the company is well-positioned to continue its trajectory of growth while contributing significantly to the UAE's maritime legacy and broader environmental goals.

With inputs from WAM