AD Ports Profit Jumps As Fleet Doubles And Hormuz Reshapes Its Cargo
AD Ports Group almost doubled second-quarter net profit as its shipping arm expanded sharply and disruption in the Gulf pushed cargo onto alternative routes. Net profit rose 88 per cent to 836 million dirhams, about 227.6 million dollars, while revenue climbed 47 per cent to 7.08 billion dirhams and earnings before interest, tax, depreciation and amortisation increased 49 per cent to 1.74 billion dirhams. Asset sales contributed 650 million dirhams of that revenue.
The growth came overwhelmingly from maritime and shipping rather than from the ports themselves. That division's revenue jumped 62 per cent to 3.82 billion dirhams with earnings up 79 per cent, and the group's bulk, multipurpose and roll-on roll-off fleet doubled to 72 vessels from 36 a year earlier. Red Sea rates rose 37 per cent year on year and 56 per cent quarter on quarter, a reminder that the same disruption imposing costs on liner operators generates windfalls for owners with tonnage positioned to serve rerouted trades.
The ports side went the other way. United Arab Emirates container throughput fell to 573,000 twenty-foot equivalent units, bulk and general cargo volumes dropped 67 per cent to 3.1 million tonnes, and container feeder volumes fell 11 per cent year on year and 15 per cent quarter on quarter to 740,000 units. Ports revenue declined 6 per cent and divisional earnings fell 23 per cent. The chief executive described the period as perhaps the most significant challenge in the group's twenty-year history.
The operational response was substantial. The group deployed 27 container ships and five bulk vessels on alternative shipping corridors, added 400 trucks, chartered six aircraft and pushed warehousing and storage capacity beyond 54,000 square metres. Building a parallel logistics network at that speed is expensive, and it shows in the cash flow: free cash flow was negative 1.03 billion dirhams after a 300 million dollar purchase taking the group's stake in a feeder shipping business to 81 per cent, though positive excluding that transaction.
Net debt stood at 22.73 billion dirhams with leverage improving slightly to 3.7 times earnings. Two acquisitions remain in progress, a Brazilian logistics and infrastructure business for 835 million dollars expected to close at the end of the third quarter, and a German logistics company due in the fourth. The group is expanding aggressively into logistics while its home ports absorb the effects of a regional conflict.
