Bahri’s profits soar by 48% in Q2 2024, boosted by higher shipping volumes

The National Shipping Company of Saudi Arabia (Bahri), listed on the Saudi Exchange, announced its financial results for the second quarter and first half of 2024.

The shipping and logistics provider reported a 48 per cent increase in net profit for Q2 2024 and a 20 per cent rise for H1 2024, driven by higher shipping volumes, improved rates for oil and chemicals transportation, and enhanced cost efficiencies compared to the same periods in 2023.

Financial performance

• Q2 2024 revenues: Increased by 15 per cent year-on-year (YoY) to SAR2.71bn.
• H1 2024 revenues: Rose by 6 per cent to SAR5.03bn, supported by better shipping rates and larger volumes in chemicals, dry bulk, and logistics.
• Q2 2024 net profit: Grew 48 per cent YoY to SAR733m.
• H1 2024 net profit: Increased 20 per cent YoY to SAR1.19bn.
• Net debt-to-EBITDA ratio: Improved 20 per cent YoY to 1.36x.
• Cash flow: Stood at SAR227m as of H1 2024.
• Fleet expansion: Added two VLCCs, one multipurpose vessel, and six chemical tankers on long-term lease contracts.

Ahmed Ali Al Subaey, CEO of Bahri, commented on the company’s performance, “Bahri had a good first half of this year and delivered commendable operational performance across our divisions. Our success was driven by optimised fleet management and route efficiency, supported by improved market conditions for VLCCs and chemical tankers.”

“From our solid base, we are focused on value-accretive growth through strategic fleet expansion and modernization, as well as in strengthening our presence in core and adjacent markets. By pursuing strategic partnerships and leveraging opportunities aligned with Saudi Arabia’s Vision 2030, we aim to support the development of the Kingdom’s maritime ecosystem as Saudi Arabia’s preeminent shipping and logistics champion.”

Business unit performance

Bahri’s operations are organised into four business units (BUs): oil, chemicals, integrated logistics, and dry bulk, alongside a company-wide ship management function.

In H1 2024, the company achieved a 6 per cent YoY growth in revenues to SAR5.03bn, largely driven by a 24 per cent YoY increase in revenue from the chemicals unit, and improved contributions from dry bulk and integrated logistics.

• Q2 2024 revenue: Increased 15 per cent YoY to SAR 2.71bn, with Chemical BU and contributions from Dry Bulk and Integrated Logistics leading the growth.
• Quarter-on-Quarter growth: Q2 2024 revenue was up 17 per cent, driven by higher shipping rates and larger cargo and logistics volumes.

Bahri’s net profit for H1 2024 was boosted by an expansion in EBITDA margin to 48 per cent from 44 per cent in H1 2023, thanks to improved cost efficiencies and higher shipping rates for oil and chemicals.

However, profitability in Dry Bulk and Integrated Logistics was somewhat reduced, and earnings from equity-accounted affiliates were lower.

• Net Debt-to-Equity Ratio: Improved to 42 per cent at the end of June 2024 from 43 per cent at the end of December 2023, and 56 per cent at the end of June 2023. Net debt stood at SAR5.69bn, down 15 per cent YoY.

Strategic initiatives

In April 2024, Bahri began commercial operations of its first mobile seawater desalination plant, recognised by Guinness World Records as the largest of its kind.

Stationed off Yanbu, Saudi Arabia, the plant has a capacity of 50 million litres per day of potable water and a 20-year take-or-pay contract with the Saudi Water Authority. Two additional plants are scheduled for operation in H2 2024.

In June 2024, Bahri announced a cash dividend of SAR0.55 per share, equating to a payout ratio of 25 per cent on full-year 2023 earnings, with dividends paid to shareholders on July 1.

Basil Abulhamayel, chief financial officer of Bahri, stated, “We are happy to report strong earnings of SAR1.19bn for the first half of 2024, 20 per cent higher than the prior year. Our Oil transport business remained resilient despite some softening in revenues, contributing to a 13 per cent EBITDA year-on-year growth through improvements in operating efficiencies.”

“Our Chemicals business delivered stellar performance, with its EBITDA rising 46 per cent from revenue growth of 24 per cent. Integrated Logistics made good progress on its business transformation journey across multiple spaces in the supply chain, while Dry Bulk demonstrated operational flexibility to meet growing customer demand despite tonnage constraints.”

“At the company level, we invested SAR1.54bn in capital expenditures, 12 per cent more than a year ago, mainly for the modernization and expansion of our shipping fleet, even as we further strengthened our balance sheet,” he added.

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