Adnoc Logistics & Services reported a sharp rise in shipping revenue for the second quarter, as the company maintained operations through the volatile Red Sea corridor despite regional tensions.
Shipping revenues at the Abu Dhabi-listed company rose 89 percent year on year to $981 million, driven by the consolidation of sales from the Navig8 tanker fleet, fully acquired at the start of 2025.
Adnoc L&S has had to negotiate the crisis in the Red Sea, as Houthi militants kept up their campaign of targeting Israeli-linked commercial ships in the area, forcing vessels to take a more costly and time-consuming route around Africa’s Cape of Good Hope.
The Red Sea, a vital artery connecting Asia and Europe through the Suez Canal, typically handles almost one-third of global container shipping, making it one of the world’s busiest trade routes.
Container shipments in the region have dropped 75 percent since these security threats escalated.
Media reported last month that fresh Houthi attacks had resulted in a further increase in shipping costs. However, some vessels passing through the Arabian Gulf are taking defensive measures, including broadcasting identity messages, to avoid being targeted by militant groups.
“We make a decision on a case-by-case basis whether it’s worth it from a safety and a value perspective and we think others in the industry are doing exactly the same,” Nick Gleeson, chief financial officer at L&S, told AGBI.
Gleeson did not disclose how much the company’s shipping rates have increased since the conflict began in late 2023, although globally, rates have gone up as much as 30 percent.
“Of course, we’d prefer a calm environment. But the reality is for us, from a profit perspective, rates lift when access to certain logistics is constrained.
“As a result of that, we’ve seen in some areas improvement in results.”
He said about 35 percent of the company’s EBITDA over the next five years is exposed to volatility in shipping rates, but at the same time L&S has around $26 billion of forward-contracted non-rate-exposed shipping income.
“The extent to which we can guide on our results and continue to deliver good profits even in a volatile market is really strong compared to most others in the industry,” he said.
On Tuesday L&S reported record quarterly net profit of $236 million, a 14 percent increase year on year. Second-quarter total revenue increased 40 percent on the same period last year to $1.3 billion.
The company’s share price rose 4.57 percent on Tuesday morning, narrowing a year-to-date loss of 7.55 percent.
