Adnoc L&S expects $4 billion full-year profit as tanker rates surge

Abu Dhabi National Oil Company's logistics and services subsidiary, Adnoc L&S, has substantially increased its profit forecast for the year. The company's third quarter earnings more than quadrupled, driven by soaring tanker charter rates due to the Iran war disruption. Net profit attributable to shareholders leapt 310% to $842.7 million in the three months to September, up from $205.4 million a year earlier.

Revenue surged 160% to $3.29 billion, while Ebitda nearly tripled to $1.09 billion. Looking ahead, Adnoc L&S anticipates annual net profit around $4 billion, a growth rate in the low-360% range, up from a previous forecast of growth in the high-110% range. The outlook covers trading until October. CEO Abdulkareem Al Masabi credited resilience as the key to the company's performance this year, citing the strength of its people and businesses.

The results reflect a windfall across the tanker industry, with daily rates for very large crude carriers on the Gulf-to-Asia route exceeding $1 million in September and reaching about $1.4 million in early October. This surge in rates, up from $30,000 to $45,000 before the war, has benefited shipowners despite the added costs and security risks.

Adnoc L&S's ninth-month profit attributable to equity holders rose 219% to $1.96 billion, with revenue jumping more than 87% to $6.96 billion. The company's board approved an interim dividend of $85.3 million for shareholders as of November 23. To capitalize on this windfall, Adnoc L&S is expanding its fleet, committing $7 billion in capital expenditure through 2030 and having roughly $24 billion in forward-contracted revenue.

The subsidiary delivered 14 vessels in the third quarter, including six VLCCs, and expects another 10 before the year ends, with three very large gas carriers and six next-generation LNG carriers scheduled for delivery in 2029.