AD Ports Group has announced its financial results for the fiscal year ending on December 31, 2023. The company reported a net profit of AED1.36 billion (approximately $370.28 million), representing a 6 percent year-on-year (YoY) increase. As a leading global facilitator of logistics, industry, and trade, AD Ports Group experienced strong operational and financial performance during this period.
Read more: AD Ports Group acquires Noatum for $681 million
The company’s revenue more than doubled compared to the previous year, reaching AED11.68 billion, which represents a 58 percent YoY increase on a like-for-like basis after adjusting for the impact of mergers and acquisitions (M&A). The growth in revenue was primarily driven by the Maritime & Shipping, Ports, Logistics, and Digital Clusters. Additionally, the completion of the Noatum acquisition on June 30, 2023, had a significant impact on the revenue growth, contributing to a six-month impact.
The Maritime & Shipping Cluster generated pass-through vessel trading revenues in the third and fourth quarters of 2023, but without associated profits. According to WAM, if the vessel trading activities, the Group’s revenue would have still increased by 77 percent YoY in 2023 or 23 percent on a like-for-like basis.
However, the company’s EBITDA was affected by a non-cash exceptional one-off impairment charge of AED1.39 billion related to an investment in a listed associate in the fourth quarter of 2023. After accounting for the adverse effects of this isolated event, the EBITDA for 2023 would have shown a year-on-year increase of 29 percent.
Higher depreciation and amortization charges
Despite the strong top-line and operating results, total net profit performance was impacted by higher depreciation and amortization charges, including the amortization of intangibles resulting from recent acquisitions. Additionally, finance costs and taxes also weighed on the net profit performance.
The financial performance of the Group does not fully reflect the revenues and profits associated with both organic and inorganic investments made in 2023. This is due to the long-term nature and required operational ramp-up of organic investments, as well as the need for a longer period to extract full synergies from acquired assets.
Looking ahead, the normalization of interest rates is expected to help narrow the gap between top-line and bottom-line growth.
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