Adnoc L&S fourth-quarter profit grows 9% on strong demand

An Adnoc L&S crude carrier. The company delivers energy products to more than 100 customers in about 50 countries. Photo: Adnoc

Adnoc Logistics and Services (L&S) reported a 9.1 per cent increase in its fourth-quarter profit, bolstered by higher demand across most of its business segments.

Net profit for the three months that ended in December rose to $180 million, the company said on Wednesday in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

The Adnoc subsidiary’s revenue during the same period grew 12 per cent to $928 million.

“We have delivered strong growth in financial returns to shareholders once again in 2024, driven by robust performance across all business segments,” said Capt Abdulkareem Al Masabi, chief executive of Adnoc L&S. "This year has been characterised by investing in the internationalisation of our business platform, the addition of new vessel types focused on transition fuels, and the growth of our large integrated logistics business.”

Adnoc L&S delivers dry bulk and 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 2023 after parent company Adnoc raised about Dh2.83 billion ($770 million) from the sale of a 19 per cent stake in the subsidiary.

Revenue from Adnoc L&S’s integrated logistics segment increased to $610 million in the fourth quarter last year, up nearly 17 per cent from the same period in 2023.

However, revenue from the company's shipping business declined by 9 per cent year over year to $211 million in the final quarter of last year, as charter rates dipped "slightly" at the end of the year due to seasonal and cyclical factors, Adnoc L&S said.

The market for tankers was “soft” in the fourth quarter and is expected to remain subdued this year, although there are signs of some “green shoots” of recovery, Nicholas Gleeson, chief financial officer of Adnoc L&S, told The National last month.

On a full-year basis, the company's revenue grew by about 29 per cent to $3.55 billion, while profit increased by 22 per cent to $756 million.

Adnoc L&S, fresh off its $1.04 billion acquisition of an 80 per cent stake in Navig8 Topco Holdings, unveiled 2025 and medium-term guidance that reflects the deal's impact. Adnoc L&S will acquire the remaining 20 per cent stake in the shipping pool operator in mid-2027 for deferred consideration of between $335 million and $450 million, depending on Navig8's core earnings performance in the meantime.

Adnoc L&S has projected mid-to-high 40 per cent revenue growth in 2025, slowing to low single-digit growth through 2029. It expects low double-digit net income growth this year, followed by high single-digit growth through 2029.

The company maintained its capital expenditure guidance, but said it expects more than $3 billion in additional organic investments by 2029, beyond announced projects.

Since its listing in 2023, Adnoc L&S has committed more than $6 billion in investments, Mr Al Masabi said.

"Our growth story continues into 2025 and beyond with more than $6 billion highly value-accretive growth opportunities committed since IPO, mostly against long-term contracts," he added.