Abu Dhabi Ship Building (ADSB), which is part of defence conglomerate Edge, aims to sign deals worth “several billion dirhams” in the next two years as part of its growth strategy, according to the company's chief executive.
“ADSB has signed over Dh8 billion ($2.17 billion) worth of business in the last three years,” David Massey, chief executive of ADSB told The National on the sidelines of the International Defence Exhibition and Conference (Idex) on Monday.
“We are confident that we will continue to sign significant new business, both for the domestic customers, and in Africa and Asia over the next coming years.”
The company, listed on the Abu Dhabi Securities Exchange, announced a deal worth €1 billion ($1.06 billion) to supply three 71-metre corvettes and other ships to the Angolan Navy on Monday.
This is the biggest deal signed by the company to date as it expands its customer base.
As part of the agreement, ADSB will supply BR71 MKII corvettes to Angola, fitted with systems including 3D radar, electronic warfare, secure communications, a 76mm main gun, and surface-to-surface and surface-to-air missile systems.
“We are in … early-stage negotiations on a number of transactions, which may be of similar size to the one we've just announced. We have a potential pipeline of several billion dirhams in the next two years,” Mr Massey said.
ADSB manufactures corvettes, offshore patrol vessels and fast patrol boats. It also offers a full range of services including maintenance, repair and refit, upgrade and conversion of vessels.
In 2021, the company won a Dh3.5 billion contract to build new patrol vessels for the UAE Navy.
Its latest deal comes as the UAE forges ahead with its Operation 300bn strategy, which seeks to increase the contribution of the local industrial sector to the country's gross domestic product to Dh300 billion by 2031, from Dh133 billion in 2021.
In June, the UAE's Ministry of industry and Advanced Technology, Emirates Development Bank and Edge Group signed an agreement to strengthen manufacturing in the defence sector.
Under the agreement, EDB will provide financing of up to Dh1 billion to accelerate the industrialisation of Edge’s offerings, while the ministry will support Edge to expand exports of more than 40 UAE-made products and services.
ADSB reported a 74 per cent year-on-year jump in its 2022 profit to Dh19.2 million as revenue more than doubled to Dh660 million.
“ADSB continues to be on an improving trend,” Mr Massey said.
“There will be a significant increase in both turnover and projected profits in 2023" because of new ship contracts, he said.
The company has adequate “financing facilities and quite a significant amount of net cash of more than Dh200 million on our balance sheet” to support its expansion plans, he said.
ADSB will also consider partnering with other shipyards around the world as part of its future growth plans, the executive said.