Bahri’s profits grew by 48% in Q2 2024, driven by growth in shipment volumes

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

The freight forwarding and logistics services provider reported a 48 percent increase in net profit in the second quarter of 2024 and a 20 percent increase in the first half of 2024, driven by higher freight volumes, lower oil and chemical shipping rates and improved cost efficiency compared to the same periods in 2023.

Financial result

• Q2 2024 revenues:Up 15 percent year-on-year (y/y) to SAR 2.71 billion.
• Revenues for H1 2024:Increased 6 percent to SAR 5.03 billion, driven by improved freight rates and higher volumes in the chemicals, bulk and logistics segments.
• Net profit for Q2 2024:Year-on-year increase of 48% to SAR 733 million.
• Net profit for H1 2024:Up 20 percent year-on-year to SAR 1.19 billion.
• Net debt to EBITDA ratio:Improved 20% YoY to 1.36x.
• Cash flow:In the first half of 2024 it amounted to SAR 227 million.
• Fleet expansion:Added two VLCCs, one multipurpose vessel and six chemical tankers under long-term lease agreements.

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

“Building on our solid base, we are focused on value creation through strategic fleet expansion and modernization, as well as strengthening our presence in core and neighboring 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 the leading champion of Saudi Arabia’s shipping and logistics.”

Business Unit Performance

Bahri’s operations are divided into four business units (BUs): Petroleum, Chemicals, Integrated Logistics and Bulk. Additionally, Bahri has a ship management function across the company.

In H1 2024, the company achieved a 6% year-on-year increase in revenue to SAR 5.03 billion, largely driven by a 24% year-on-year increase in revenue from its chemical unit and an increased share of bulk cargo and integrated logistics.

• Q2 2024 revenues:Up 15 percent year-on-year to SAR 2.71 billion, with growth led by the Chemicals business unit and contributions from the Dry Bulk and Integrated Logistics divisions.
• Quarter-on-quarter growthRevenue in the second quarter of 2024 increased by 17 percent, driven by higher freight rates and higher cargo and logistics volumes.

Bahri’s net profit in H1 2024 was driven by an increase in EBITDA margin from 44% in H1 2023 to 48%, driven by improved cost efficiency and higher crude oil and chemicals freight rates.

However, profitability in the bulk cargo and integrated logistics segment declined slightly, and profits of equity-valued subsidiaries were lower.

• Net debt to equity ratio:Increased to 42% at end-June 2024 from 43% at end-December 2023 and 56% at end-June 2023. Net debt amounted to SAR 5.69 billion, down 15% YoY.

Strategic initiatives

In April 2024, Bahri began commercial operation of its first mobile seawater desalination plant, recognized by the Guinness Book of Records as the largest of its kind.

The plant, located near Yanbu in Saudi Arabia, has a capacity of 50 million liters of drinking water per day and a 20-year take-or-pay contract with the Saudi Water Authority. Two additional plants are scheduled to come online in the second half of 2024.

In June 2024, Bahri declared a cash dividend of SAR 0.55 per share, equivalent to a payout ratio of 25 per cent of full-year 2023 profits, with dividends to be paid to shareholders on 1 July.

Basil Abulhamayel, CFO of Bahri, said: “We are pleased to report strong revenues of SAR 1.19 billion for the first half of 2024, up 20 percent year-on-year. Our crude oil transportation business remained resilient despite some weakness in revenues, contributing to a 13 percent year-on-year EBITDA increase driven by improved operational efficiencies.”

“Our Chemicals business performed strongly, with EBITDA up 46 percent compared to revenue growth of 24 percent. Integrated Logistics made good progress in its business transformation across multiple supply chain areas, while Dry Bulk demonstrated operational agility to meet growing customer demand despite tonnage constraints.”

“At the company level, we invested SAR 1.54 billion in capital expenditure, up 12 percent year-on-year, mainly to modernize and expand our shipping fleet, while strengthening our balance sheet,” he added.

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