Updated: Feb 16
AD Ports Group announced its financial results for the 12 months ended December 31, 2022, reporting strong operational and financial performance, with revenue growth of 41% year-on-year to AED 5.5 billion (+23% year-on-year to AED 4.8 billion organically).
The Group's strong results were driven by the performance of its Maritime and Ports Clusters and acquisitions, and new partnerships.
· EBITDA increased to AED 2.2 billion in 2022, +37% YoY (+24% YoY to AED 546 million in Q4 2022). Organically, EBITDA grew by 27% YoY to AED 2.0 billion
· EBITDA margin stood at 39.8% in 2022 (31.0% in Q4 2022)
· Total Net Profit reached AED 1.3 billion in 2022, +53% YoY (+42% YoY to AED 365 million in Q4 2022)
· Earnings per share (EPS) increased to AED 0.26 for the entire year in 2022, up from AED 0.22 in 2021
· Operating cash flow amounted to AED 1.6 billion in 2022, implying a cash conversion of 74%
· AED 5.6 billion was spent on organic growth-oriented CapEx in 2022, as the Group continued to press ahead with its organic capital investment plans
· Free cash flow remained negative at AED 4.5 billion due to the front-loaded nature of the ongoing CapEx program but also due to acquisitions/investments
Operationally, in the Ports Cluster, container throughput grew to 4.33 million TEUs (twenty-foot equivalent units) in 2022, +28% year-on-year (+27% year-on-year to 1.17 million TEUs in Q4 2022) as utilisation of the two existing container terminals continued to improve (51% in 2022 vs 40% in 2021 and 55% in Q4 2022 vs 43% in Q4 2021).
On a like-for-like (LFL) basis, general cargo volumes increased by 3% to reach 31.7 million tonnes in 2022, compared with 44.6 million tonnes in 2021, which included a one-off sand supply project of 14.7 million tonnes.
Ro-Ro and Cruise Passenger volumes also rebounded strongly on the back of the diminished effect of the COVID-19 pandemic.
All operational indicators - vessel fleet, port calls, container feedering volumes, transhipment volumes, and marine services activities - recorded strong growth in the Maritime Cluster.
In the Logistics Cluster, the key highlight in Q4 2022 was the acquisition announcement of 100% ownership of Noatum, a logistics services provider with a presence in 26 countries across five continents, for an Enterprise Value of EUR 660 million.
Upon completion, the value and earnings accretive acquisition will significantly broaden AD Ports Group's global footprint and position it among the world's leading logistics and freight forwarding companies.
Another key highlight in Q4 2022 was the acquisition announcement of an 80% equity stake in Dubai-based Global Feeder Shipping (GFS), a global container shipping company, for an Enterprise Value of AED 2.9 billion (USD 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. 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% stake in International Associated Cargo Carrier (IACC) in Egypt, which wholly owns Transmar and TCI, for an Enterprise Value of AED 514 million (USD 140 million).
The Group inked seven M&A transactions in 2022, totalling AED 5.9 billion, with GFS, Noatum, and Eskan Al Jamae yet to be completed.
In terms of financial performance, EC&FZ Cluster recorded a revenue increase of 6% year-on-year to reach AED 1,658 million in 2022, benefitting from previously signed land leases, higher utility revenues, strong momentum in warehouses revenues, as well as the 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 7% year-on-year to AED 1,135 million, backed by a healthy product mix and gains from the acquisition of TCI, one of the two entities under IACC, Egypt.
Double-digit growth in concession fees and leases and 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% year-on-year when adjusted for 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 (most significant revenue contributor with 37% of total revenue and second largest EBITDA contributor with 24% of total EBITDA).
The Maritime Cluster's revenue growth of 256% year-on-year in 2022 to AED 2,161 million (+282% year-on-year in Q4 2022) was driven by a more comprehensive service offering and increased activity in new business segments, including feedering, chartering, transhipment, 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 revenue and EBITDA with AED 689 million and AED 150 million in 2022, respectively, and are expected to continue supporting the Cluster's growth.
The Logistics Cluster registered a 12% year-on-year revenue decline to AED 532 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 critical 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% year-on-year to AED 400 million in 2022, driven by the development progress of various technology-led solutions.
Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO "Of 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, thanks to the continuous support of our wise leadership.
"TheGroup'ss remarkable financial and operational performance was driven by our Maritime and Portsof 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 significant player in global trade and logistics. For 2023, we will focus on maximising returns and generating portfolio synergies while providing our customers with superior end-to-end supply chain outcomes.”
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 program of around AED 15 billion over the next five years, with spending of AED 1.4 billion in Q4 2022 and AED 5.6 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. With a Net Debt to EBITDA ratio of 1.9x at the end of 2022 (vs 2.3x in 2021), AD Ports Group maintains a solid financial position and robust balance sheet, with significant capital resources still available for both organic and inorganic growth as we advance. With the recent M&A transactions announced, we update our medium-term guidance (5Y organic CAGR between 2022 and 2027) to 25-30% for revenue and 20-25% for EBITDA."
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 and routes and expanding our service offerings. At the regional level, our ports and maritime expansion have been asset and network-led. Our ambitious strategy positioned us for local and regional growth and expanded our reach globally with a key focus on our key trading regions, countries, and routes."
AD Ports Group's credit rating of A+ was reaffirmed by S&P and Fitch multiple times post-listing and post-acquisition announcements.
The Group's shares began trading on the primary market of the Abu Dhabi Securities Exchange (ADX) on February 8, 2022, under the ticker symbol "ADPORTS", returning over 80% in the first year of trading, which ranks the stock in the top three best performers among new listings in the region.
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