Adnoc L&S profits surge 34% on higher demand for logistics and shipping

The Adnoc subsidiary’s revenue jumped 42% year on year to $840m in the latest reported quarter

Adnoc L&S delivers energy products to more than 100 customers in about 50 countries. Photo: Adnoc

Adnoc Logistics and Services on Wednesday raised its revenue forecast for the full year after reporting a 34 per cent increase in its first-quarter profit, driven by higher demand across all its businesses.

Net profit for the three months that ended in March rose to $194 million, the company said in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

The Adnoc subsidiary’s revenue jumped 42 per cent year on year to $840 million in the latest reported quarter.

“Adnoc L&S has started 2024 by delivering another set of strong financial results, building on our record-breaking public listing and the robust growth we achieved in 2023,” said its chief executive Capt Abdulkareem Al Masabi.

“We are continuing to expand our market-leading fleet while growing our geographic reach, service offerings and global customer base to unlock increased value for our shareholders.”

Adnoc L&S delivers energy products to more than 100 customers in about 50 countries through its three business units including integrated logistics, shipping and marine services.

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

Revenue from Adnoc L&S’s integrated logistics segment increased to $546 million in the first quarter, up 55 per cent from the same period last year.

Meanwhile, the company’s shipping business recorded a revenue of $251 million in the first three months of the year, up 25 per cent from the first quarter of 2023.

Adnoc L&S said its robust first-quarter performance was driven by higher investment in maritime logistics assets as demand for the company's services grows both within the UAE and in international markets.

On Wednesday, Adnoc L&S also raised its revenue growth forecast for 2024 to the low 30 per cent range, up from the previously expected “high teens” percentage.

The company has forecast that its core earnings will grow in the low 30 per cent range while net income will expand in the low 20 per cent range in 2024.

The company, which earmarked up to $5 billion under its medium-term capital expenditure programme last year, has been pursuing a major fleet expansion to expand its reach and better serve its global customers.

Last year, Adnoc L&S took delivery of eight self-propelled jack-up barges through its subsidiary Zakher Marine International Holdings, to expand its offshore services.

Parent company Adnoc plans to increase its crude production to five million barrels per day by 2027 while positioning itself as a major player in the natural gas value chain.

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

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

Before the acquisition, ZMI, which is currently an independent entity under Adnoc L&S, was the world’s largest owner and operator of self-propelled jack-up barges, with operations in the UAE, Saudi Arabia, Qatar and China.