Developer and regulator of ports in Abu Dhabi, AD Ports Group has announced the purchase of ten offshore vessels, strengthening the offshore operations in the Middle East and Southeast Asia.
At around US$200 million, the investment was used for a well-maintained and diverse fleet with an average age of 9 years, significantly less than the industry standard. All of the 10 vessels are expected to be delivered by the end of Q4 2023 with with financial consolidation taking place from Q1 2024 onwards.
The acquisitions come from global Offshore Supply Vessel owner and operator, E-NAV. The deal covers a variety of vessel types, including Multipurpose Supply Vessels (MPSVs), Platform Supply Vessels (PSVs), Diving Support Vessels (DSVs) and Accommodation Workboats (AWB’s). These make for an appealing offering, especially in light of impending large-scale offshore projects in the Middle East, where there is a current lack of quality assets.
The investment will result in improved capabilities, capacity, and expanded geographic presence in the offshore segment, which will benefit the Group’s energy sector clients. In light of predictions of an upward trend in the offshore oil and gas market over the medium-long term, the transaction also supports AD Ports Group’s strategy to maintain a balance in its portfolio of maritime businesses with assets and services exposed to various market forces and cycles, thereby limiting its performance volatility.
In Southeast Asia and the Middle East, AD Ports Group will assume well-established contracts with blue chip clients in the oil and gas sector, national oil companies, and international oil companies. For the foreseeable future, it anticipates using about 95% of the current contracts. Over the following three to five years, the investment is anticipated to yield revenue of more than US$70 million annually, and the transaction would indicate a 12-month ahead EV/EBITDA of about 5.0x.
“I am pleased to announce this key investment, the expansion of our offshore fleet is a significant move in our strategic objective to fortify and enhance our Middle East and Southeast Asia footprint. We recognise the increasing demand in the energy sector, thereby, through bolstering our fleet, our Group is better positioned to demonstrate our role as a premier offshore service provider within these regions, whilst meeting the diverse and growing demands of our customers.”
Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO for AD Ports Group.
The offshore oil & gas and offshore wind markets globally have been performing positively and are expected to develop with strong margins. AD Ports Group plans to fortify its present position in this market in order to capitalise on these positive trends, enhance operational efficiencies, and provide superior customer service.
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