The new vessels will increase the group's offshore and subsea capacity by 20 per cent, boosting its operations in the Middle East and South-east Asia, the company said in a filing to the Abu Dhabi Securities Exchange on Tuesday.
AD Ports acquired the vessels, which have an average age of about nine years, from E-Nav. The fleet includes multipurpose supply vessels, platform supply vessels, diving support vessels and accommodation workboats.
All 10 vessels are expected to be delivered in the fourth quarter of 2023, with financial consolidation taking place from the first quarter of next year.
“The expansion of our offshore fleet is a significant move in our strategic objective to fortify and enhance our Middle East and South-east Asia footprint,” said Capt Mohamed Al Shamsi, managing director and group chief executive of AD Ports Group.
“We recognise the increasing demand in the energy sector, thereby, through bolstering our fleet, our group is better positioned to … meeting the diverse and growing demands of our customers.”
The investment is expected to generate more than $70 million a year in revenue in the next three to five years and the transaction would imply a 12-month forward an enterprise value to earnings before interest, taxes, depreciation and amortisation (ebitda) of about five times, AD Ports said.
The global offshore oil and gas market has been performing “positively” and is forecast to grow with “healthy margins”.
AD Ports Group plans to strengthen its current position in the market to take advantage of this growth and improve operations, it said.
Established in 2006, the AD Ports Group, which owns and operates 10 ports in the UAE, has been expanding its operations globally.
In May, the company said it had invested Dh955 million ($260 million) to buy eight bulk carriers and crude tankers to boost its maritime business.
The latest addition to its fleet is “an attractive offering, particularly in relation to upcoming major offshore projects in the Middle East where there is a shortage of quality assets”, it said.
AD Ports Group expects a utilisation of about 95 per cent of existing contracts for the foreseeable future.
“The group’s clients in the energy sector can expect to benefit from the enhanced capabilities, capacity and increased geographic footprint in the offshore segment that the investment will bring,” the company said.
The transaction also supports AD Ports Group’s strategy to continue to balance its portfolio of maritime businesses with assets and services exposed to different market forces and cycles, it said.
This will limit its performance volatility, amid forecasts of an upward trend in the offshore oil and gas market over the medium to long term, it said.