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ADNOC Raises $769 Mln from Logistics & Services IPO

ADNOC Raises $769 Mln from Logistics & Services IPO
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ADNOC Raises $769 Mln from Logistics & Services IPO

ADNOC Raises $769 Mln from Logistics & Services IPO

Abu Dhabi National Oil Co. (ADNOC) achieved revenues worth 2.83 billion dirhams ($769 million) for launching an IPO of a minority stake that represents 19 percent in the Logistics & Services unit.

The share was increased from 15 percent to 19 percent at 2.01 dirhams each to meet the huge demand from investors.

The IPO saw exceptional demand and the book-building process generated orders of 460 billion dirhams (over $125 billion), implying an oversubscription level of 163 times, the highest-ever oversubscription level for a UAE bookbuild IPO.

Group Chief Financial Officer of ADNOC Khaled Al Zaabi said, “We are delighted with the unparalleled demand for ADNOC L&S shares from UAE retail investors as well as the local, regional, and global investor community.”

“This offering saw the largest demand globally for an IPO this year to date and achieved the highest-ever oversubscription for a UAE bookbuild IPO,” he added.

As the sixth company that ADNOC has listed on ADX in the past five years, ADNOC L&S follows the landmark IPOs of ADNOC Distribution, ADNOC Drilling, Fertiglobe, Borouge, and ADNOC Gas.

ADNOC IPOs to date have raised 29.38 billion dirhams (more than $8 billion), with total demand exceeding 1.41 trillion dirhams ($385 billion), supporting ADNOC’s ambitious growth strategy.

The company’s revenue and adjusted EBITDA for the year ended December 31, 2022 was 8.4 billion dirhams ($2.3 billion) and 2.2 billion dirhams ($599.3 million), respectively, with revenue having increased at a compound annual growth rate of more than 20 percent from 2017 to 2022.

ADNOC L&S is undergoing a major strategic expansion drive, underpinned by an up to 18.36 billion dirhams ($5 billion) medium-term capital expenditure program, providing investors with an exciting growth opportunity.

ADNOC L&S intends to pay a fixed dividend amount of 716 million dirhams ($195 million) for the second quarter and the second half of 2023 (equivalent to annualized dividends of $260m).

Thereafter, the company expects to increase the annual dividend per share by at least 5 percent per annum.

The expected date of listing on ADX is 1st June 2023.

ADNOC has offered six IPOs over the past five years. (Reuters)

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.