ADNOC Logistics & Services (ADNOCLS) Q4 2023 earnings summary

Executive summary

• FY23 revenue rose 41% to $2,755 million, EBITDA increased 93% to $876 million, and net profit grew 138% to $620 million.

• Growth was led by Integrated Logistics expansion, including ZMI integration, higher volumes and EPC activity; strong Tanker and Gas Carrier rates supported Shipping.

• EBITDA margin expanded 9 percentage points to 32%; medium-term average annual EBITDA growth target is in the low teens.

• FY23 marked the first year as a listed entity, with a 91% share-price increase and continued execution of the growth strategy.

Financial highlights

• FY23 revenue was $2,755 million versus $1,952 million in FY22; Q4 revenue reached $828 million, up 18% QoQ and 26% YoY.

• FY23 EBITDA was $876 million versus $453 million; Q4 EBITDA was $242 million, up 11% QoQ and 43% YoY.

• FY23 net profit was $620 million versus $261 million; Q4 net profit was $165 million, up 12% QoQ and 89% YoY.

• FY23 net cash from operating activities increased 192% to $823 million from $281 million; capital expenditures were $774 million versus $300 million, and free cash flow was $49 million versus negative $33 million.

• Q4 net cash from operating activities was $177 million, versus $345 million in Q3 and $175 million in Q4 2022.

Outlook and guidance

• FY24 consolidated revenue growth target is in the high teens; medium-term annual revenue growth target is mid- to high-single digits.

• FY24 capex guidance is $1.0–$1.1 billion; medium-term organic growth capex beyond the IPO-announced plan is ~$4–5 billion.

• FY24 Integrated Logistics revenue growth target is in the low 30s, with EBITDA growth above 30%.

• Medium-term average annual EBITDA growth targets are low teens consolidated, high teens for Shipping and low- to mid-single digits for Marine Services.

• Medium-term net debt/EBITDA target is 2.0–2.5x; investment policy targets low double-digit IRRs.