Adnoc Logistics and Services reported an 89 per cent increase in its fourth-quarter profit, boosted by higher demand in the company’s integrated logistics business.
Net profit for the three months that ended in December rose to $165 million, the company said on Wednesday, in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.
Adnoc L&S’ revenue jumped 26 per cent year-on-year to $828 million in the latest reported quarter.
“Our strong balance sheet and cash position will enable us to unlock additional growth opportunities,” said Capt Abdulkareem Al Masabi, chief executive of Adnoc L&S.
“We remain confident in our medium-term guidance and the potential to further strengthen our position as a global energy maritime logistics leader,” he said.
The company’s board has recommended a cash dividend of $130 million, or 6.45 fils per share, for the second half of 2023, which will paid in the second quarter of this year depending on shareholder approval, Adnoc L&S said.
Adnoc’s maritime logistics arm aims to increase annual dividends by at least 5 per cent over the medium term, taking the 2023 annualised dividend of $260 million as a base, it said.
For the full year 2023, Adnoc L&S’ net profit rose nearly 140 per cent to $620 million, while revenue surged 41 per cent to $2.76 billion.
Revenue from the company’s integrated logistics segment increased 88 per cent to $1.74 billion last year, helped by continued growth in revenue and margins on core business lines as well as the acquisition of ZMI Holdings.
The company said it was aiming for “high teens” percentage growth in revenue for 2024 and “mid-to-high single-digit” percentage growth year-on-year in the medium term.
In terms of earnings before interest, taxes, depreciation, and amortisation, Adnoc L&S hopes to record average annual growth in the “low teens” over the medium term.
Adnoc L&S delivers 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 debuted on the Abu Dhabi bourse in June last year after parent company Adnoc raised about Dh2.83 billion from the sale of a 19 per cent stake in the subsidiary.
In 2023, Adnoc L&S unveiled its global Integrated Logistics Services Platform (ILSP), among the largest turnkey offshore logistics offerings in the world, the company said.
Adnoc L&S bought ZMI, an Abu Dhabi company that owns and operates offshore support vessels, in July 2022.
Before the acquisition, ZMI, which is currently operating as an independent entity under Adnoc L&S, was the world’s largest owner and operator of self-propelled jack-up barges, with operations in the UAE, Saudi Arabia, Qatar and China.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE currency: the story behind the money in your pockets
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
