AD Ports Group Reports 86% Q2 Profit Surge Driven by Trade Routes Avoiding Strait of Hormuz

Abu Dhabi's AD Ports Group has announced an 86 per cent annual increase in its second-quarter net profit, successfully diversifying its trade routes away from the Strait of Hormuz, which remains restricted due to the ongoing Iran war.

Net profit attributable to the owners of the company for the three-month period reached Dh596.7 million ($162.4 million), according to a statement released on Friday to the Abu Dhabi Securities Exchange, where its shares are traded. Revenue experienced a 47 per cent year-on-year surge, climbing to Dh7.08 billion. AD Ports attributed this growth to the strong operational and financial performance across its maritime and shipping, economic cities and free zones, and logistics clusters.

Capt Mohamed Al Shamisi, managing director and group chief executive of AD Ports Group, noted that the company achieved record financial performance despite operating through what may be the most significant challenge in its 20-year history. He highlighted the effectiveness of the landlord port business model, the diversification of trade routes through the UAE East Coast, and an expanding international port footprint in Spain, Pakistan, Egypt, and Angola in mitigating regional disruptions.

The Strait of Hormuz has been effectively closed since the start of the Iran war on February 28, causing widespread disruptions to global shipping and logistics as operators search for alternative corridors.

To counter the closure, AD Ports ramped up alternative multimodal trade routes and operations under the UAE's national programme to strengthen supply chain resilience. Continuity measures implemented since March include rerouting cargo operations and feeder services to Fujairah Terminals and Khor Fakkan Port on the Gulf of Oman, outside the Strait of Hormuz. The company also expanded regional feeder shipping services connecting ports in India, Pakistan, Oman, and the Red Sea along the Upper Arabian Gulf.

A fleet of 27 container vessels and five bulk vessels served these alternative shipping trade corridors to maintain uninterrupted cargo movement. Furthermore, AD Ports established land trade corridors from Fujairah Terminals and Khor Fakkan Port to Khalifa Port, Jebel Ali Port, and Sharjah, adding 400 trucks during the second quarter while increasing rail service frequency with Etihad Rail. Alternative multimodal measures also incorporated new air cargo solutions utilizing six chartered aircraft for critical commodities such as food and pharmaceuticals. The company plans to further enhance its warehousing and storage capacity by the end of the year.

AD Ports, with a portfolio of 40 terminals spanning 50 countries, has pursued an active acquisition strategy. In June, the company announced its largest-ever acquisition, agreeing to buy Corredor Logística e Infraestrutura, an agri-bulk port terminal operator in Brazil, for an enterprise value of Dh3.1 billion, marking its entry into the South American market. Additionally, it purchased Germany-based MBS Logistics for Dh300 million, acquired an additional 30 per cent equity stake valued at Dh1.1 billion in Dubai-based Global Feeder Shipping to raise its total holding to 81 per cent, and submitted an offer for a majority stake in Alexandria Container and Cargo Handling Company.