Newly listed Adnoc Logistics & Services open to expanding in GCC, executive says

The company is aiming for 'mid to high' single-digit growth in its revenue over the next few years

Adnoc Logistics and Services bell ringing ceremony at ADX. Victor Besa / The National.

Adnoc Logistics & Services, the maritime logistics unit of Adnoc, could look at expanding its operations in the broader GCC region, according to the company’s chief financial officer.

In July last year, Adnoc L&S bought Zakher Marine International, an Abu Dhabi company that owns and operates offshore support vessels.

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

“We already have offices now in Qatar and Saudi Arabia as a result of the acquisition of Zakher Marine, so extending our reach using those offices and growing into those regions is definitely attractive,” Nicholas Gleeson told The National in an interview.

“Everything is a possibility.”

Shares of Adnoc L&S surged as much as 58 per cent as the company made its debut on the Abu Dhabi Securities Exchange on Thursday.

The company had set its final offer price at Dh2.01 share, towards the higher end of its previously announced range of Dh1.99 to Dh2.01 a share, giving it a market capitalisation at the time of listing of about $4.05 billion.

Captain Abdulkareem Al Masabi, centre, ADNOC Logistics & Services CEO rings the bell at ADX as Dr. Sultan Al Jaber, right, ADNOC Managing Director and Group CEO with H.E. Hisham Khalid Malak, left, ADX Chairman and Abdulla Al Nuaimi, ADX CEO look on. Victor Besa / The National

The stock exchange listing came as Adnoc L&S is undertaking a global expansion programme, aimed at providing a broader service to its customers while supporting and enabling the growth of their upstream and downstream operations.

“We have a lot of business growth opportunities already in the pipeline and we're in the process of realising those, finding new opportunities [and] continuing that expansion,” said Mr Gleeson.

This includes extending the company’s reach across logistics, international shipping and preparing its fleet to transport additional volumes of crude oil and natural gas from Adnoc, he said.

Nicholas Gleeson, chief financial officer, Adnoc L&S.

In April, Adnoc L&S added five new-build very large gas carriers (VLGC) to its fleet to meet the growing global demand for gas.

The company currently has a fleet made up of more than 800 owned, operated, and chartered vessels.

“We need to increase our fleet to meet continuing growth in demand for the integrated logistics segment,” Mr Gleeson said.

In March, the company unveiled its global Integrated Logistics Services Platform (ILSP) and signed a $2.6 billion contract with Adnoc Offshore to provide logistics services.

The ILSP is among the largest turnkey offshore logistics offerings in the world that will enable Adnoc L&S to co-ordinate end-to-end management of logistics and maritime operations from its Mussafah base in Abu Dhabi.

Adnoc targets 5 million barrels per day of production capacity by 2027, Mr Gleeson said.

“The acceleration of production will be met by the acceleration in our plans to transport the production.”

The company reported a net profit of $144.9 million in the first quarter of 2023, up 79 per cent from the same period a year earlier.

Revenue for the period grew to $592.18 million from $312.96 million a year ago.

Adnoc L&S expects “mid to high” single-digit growth in its revenue over the next few years, with margins growing to the mid-30s from the current 30 per cent.