DP World fully acquires Australia’s Silk Logistics

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TODAY: DP World fully acquires Australia’s Silk Logistics + Qatar Airways to participate in IAG buyback scheme

Good morning, wonderful people. It’s a relatively busy day in logistics land, with several big M&A stories to dig your teeth into. Adnoc Gas acquired Adnoc’s stake in Ruwais, while DP World acquired Australia’s Silk Logistics. Plus: We have a couple of earnings for you and the latest concerns around Trump’s impacts on trade in countries around the world.

HAPPENING TODAY-

Saudi Arabia’s two-day Saudi Airport Exhibition wraps today in Riyadh. The exhibition brings together global industry leaders to view the latest global aviation technologies and build new partnerships. The event seeks to encourage bilateral discussions between Saudi aviation leaders and global supply chains to boost the country’s aviation industry.

WATCH THIS SPACE-

#1- Al Seer Marine, a subsidiary of International Holding Company, expanded its JV with Damen International beyond naval shipbuilding to include commercial shipbuilding as well, according to a press release (pdf). The JV targets manufacturing over 26 vessels in the UAE in 2025. It will use Al Seer Marine's manufacturing facilities in Abu Dhabi and Damen's shipyards in Sharjah, Fujairah, and Dubai.

#2- Egypt cuts LNG imports: Egypt has reduced its imports of liquefied natural gas (LNG) via its gasification plant in Ain Sokhna port by a third to 500 mn cubic ft per day, a government official told Asharq Business. Egypt’s power plants currently consume 3.5 bn cubic ft of gas per day, down from the 4.2 bn cubic ft per day last summer.

Background: In a step to prevent power outages, Egypt started purchasing LNG shipments in April. Egypt imports around 1.2 bn cubic feet of natural gas daily through the Jordan Gas Pipeline, in addition to liquefied natural gas shipments received at the Aqaba Gas Terminal and supplies from Israeli fields.

REMEMBER- Egypt has been considering the purchase of a floating regasification unit in partnership with Jordan to uptake and process LNG shipments for integration into their national grids.

#3- 2G Energy wants to set up green hydrogen, biogas projects: Germany’s 2G Energy is in talks with five Egyptian companies to set up green hydrogen, biogas, and combined heat and power (CHP) projects locally, project engineer Jonas Stormann told told Al Arabiya without disclosing the expected investment ticket of these projects. The company is in negotiations with three companies over green hydrogen production projects — including one in Suez — and two over biogas projects, he added.

#4- Post-IPO, Talabat plans to tap into verticals including healthcare, beauty, pharma, pet services and fintech, its CEO Tomaso Rodriguez told Bloomberg in an interview. “We strongly believe that every single USD we invest in expanding these areas has a much better return than a geographical expansion at this point,” Rodriguez said.

The revenue forecast is sunny: The company anticipates revenue growth of 22-23% for 2024, followed by 17-18% in 2025, and around 14% in the medium term, Rodriguez said. Talabat previously announced that it aims to distribute dividends amounting to 90% of net income post-listing, starting with a minimum payout of USD 100 mn in April.

#5- Nile Recycling to build PET plastic recycling facility in Egypt: Egypt’s Nile Recycling has signed an agreement with Main Development Company (MDC) to establish a polyethylene terephthalate (PET) plastic recycling facility in the Sokhna Industrial Zone with an initial investment of USD 20 mn, according to a Suez Canal Economic Zone statement.

The details: The project will recycle PET bottles into food-grade recycled PET plastic, with a targeted capacity of 22k tons per year once the facility starts production in 1H 2025. The recycled plastic will be used for packaging and food containers, with plans to export abroad. The project is also expected to reduce carbon emissions by 40k tons annually.

MARKET WATCH-

#1- Saudi Arabia’s crude oil supply to China is forecasted to take a hit next month, dipping to 36.5 mn barrels in December, the lowest volume since July, trade sources told Reuters. Weak demand from China is expected to cause crude oil volumes to drop for the second consecutive month, with some 37.5 mn barrels expected to be received by Chinese refiners in November, down from around 46 mn barrels in October. Low levels of fuel consumption in road transport and small margins are set to drag down China’s refining activity in 4Q, with the country’s state majors all expected to lift less crude next month.

#2- Oil prices slumped this morning on the back of oversupply concerns and disappointment over China’s latest stimulus plan, Reuters reports. Brent crude futures fell 0.2% to USD 71.66 a barrel, while US West Texas Intermediate crude futures were down 0.3% to USD 67.84 a barrel.

#3- Baltic index continues to rise: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — rose 4.2% yesterday to its highest since 21 October. The capesize index gained 201 points, while the panamax index rose six points and the smaller supramax shed 15 points.

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CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Saudi Airport Exhibition on Monday, 11 November and Tuesday, 12 November in Riyadh. The two-day exhibition will bring together global industry leaders to discuss the latest technologies around the world in the aviation industry. It looks to encourage discussion between Saudi aviation leaders and the global supply chain industry.

Bahrain will host The Bahrain International Airshow on Wednesday, 13 November and Friday, 15 November near Awali. The three-day event is bringing together over 180 participating companies from over 59 represented nations globally.

Egypt will host the Autotech Exhibition on Sunday, 17 November until Tuesday, 19 November in Cairo. The event will bring together prominent local and international companies to discuss and evaluate the latest developments and trends in the automotive aftermarket and feeder industries.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

DP World acquires 100% of Australia-based Silk Logistics Holdings

DP World expands its operations in Australia: DP World Australia, a subsidiary of Dubai-based port operator DP World, is acquiring 100% of port-to-door logistics services provider Silk Logistics Holdings, according to a statement. DP World signed a binding scheme implementation deed with a cash offer set at AUD 2.14 (c. 5.16) per share, valuing the company at AUD 174.5 mn (c. AED 421.3 mn). The transaction, which is awaiting Silk Logistics shareholder approval, is expected to be completed in 1H 2025.

The game plan: DP World will uptake Silk Logistics’ major business segments in port logistics and contract logistics, which specialize in wharf cartage services between Australia’s major ports, warehousing, and multimodal distribution solutions. This includes acquiring the firm's Australian operation portfolio, including 21 logistics hubs and 25 warehousing sites across five Australian states.

About DP World Australia: The firm operates four container terminals and three container parks in Sydney, Brisbane, Melbourne and Fremantle, in addition to warehouses and inland distribution centers.

DP World is on an M&A roll: DP World fully acquired Hong Kong-based logistics firm Cargo Services Far East in September. DP World also entered into a strategic merger and formed a joint venture, DP World Evyap, with Turkey’s Evyap Group in July for the management of two major ports in Turkey’s Marmara region.

All part of a wider global expansion plan: DP World is reportedly looking to invest as much as AED 1.6 bn in ports across the Philippines. It has been eyeing potential investments for a logistics hub and an industrial park in the Philippines since earlier this year. The firm committed GBP 1 bn (c. USD 1.3 bn) in investments for the DP World-operated London Gateway port last month. It also inked an MoU with officials from Uzbekistan to develop freezones and logistics centers in the country in September. The firm also plans to shell out USD 3 bn on new port infrastructure in Africa over the next three to five years.

Qatar Airways to participate in IAG buyback scheme

Qatar Airways to participate in IAG buyback scheme: Qatar Airways is selling EUR 88 mn in shares as part of a share buyback program launched by British Airways owner International Consolidated Airlines Group (IAG), with the aim of retaining its 25.1% stake, according to a London Stock Exchange statement published last week. The buyback program will also include EUR 262 mn in share purchases from the market. The program kicked off on 11 November and will end no later than 28 February 2025.

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The details: The carrier entered into agreements with Goldman Sachs and Morgan Stanley, under which it will sell them its IAG shares, instead of selling them in the market. The shares will be sold during each trading day during the program — proportionate to the shares acquired by the banks on the open market — at a price share equal to the volume weighted average price the banks purchase.

SOUND SMART- What is a share buyback program? A share buyback is when firms buy back their own shares from the market and cancel them, therefore reducing share capital. The fewer shares in circulation mean that each shareholder in turn gets a larger stake in the firm and a higher return on future dividends.

Background: Qatar Airways acquired a stake for USD 600 mn in IAG back in 2020, increasing its holding to 25.1%, Reuters previously reported. The Qatari firm previously held a 21.4% stake in IAG — which owns Spanish carriers Iberia and Vueling and Ireland's Aer Lingus. Qatar Airways first invested in IAG in 2015 — buying 9.99% of the firm.

REMEMBER- Spain’s Iberia joined Qatar Airways and British Airways’ airline joint business back in July 2023. Qatar Airways and British Airways currently operate the world’s largest airline joint business, encompassing over 60 countries.

Adnoc Gas to snap up 60% of Ruwais LNG project, to pour USD 15 bn into growth by 2029

Adnoc Gas is set to acquire a 60% stake in the Ruwais LNG project from its parent group Adnoc in 2H 2028 at cost, for an estimated value of USD 5 bn, the company said in a press release (pdf). The plant’s first production unit is slated to come online in 2H 2028, with the second following in early 2029.

Ownership breakdown: Global energy giants Shell, BP, TotalEnergies, and Japan’s Mitsui own the remaining 40% stake in Ruwais, at a 10% stake each. They acquired the stakes in July.

Adnoc Gas has had its eyes on Ruwais from the start: “It has always been our intention to acquire Adnoc's 60% stake in Ruwais LNG. This investment is a central component of our ambitious international growth plans and will strengthen Adnoc Gas' position as a powerhouse in the global LNG market,” Adnoc Gas CEO Ahmed Mohamed Alebri said in the statement. We knew this was planned since earlier this year.

Adnoc Gas will dispatch the first cargo from the Ruwais facility in late 2028, Adnoc Gas CFO Peter Van Driel said in a virtual media roundtable attended by EnterpriseAM UAE. The company is currently kicking off construction works at Ruwais, Van Driel added, noting that the new plant will help serve gas demand of “countries either in Europe, the Far East, or in Asia.”

Ruwais already has offtake agreements lined up: The company has sold 75% of Ruwais’ total production capacity to international customers, Van Driel said. The sold volumes are equivalent to over 7 mn tons per annum (mtpa) of the total 9.6 mtpa of LNG.

ICYMI- The signed offtake agreements include a 15-year agreement with China's ENN Natural Gas to deliver 1 mn tons of LNG annually from Ruwais, along with another 15-year agreement with German energy giant Energie Baden-Württemberg to supply it with 0.6 mn tonnes of LNG per year. Adnoc also signed long-term LNG supply agreements to deliver 1.6 mn tonnes per year from the new plant, with 1 mn metric tonnes to Shell and 0.6 mn tons to Mitsui. Most recently, Adnoc secured a 15-year sales and purchase agreement (SPA) with Sefe Marketing & Trading Singapore for 1 mn tonnes of LNG.

We’ll soon hear of more purchase agreements from Ruwais: In the coming months, Adnoc Gas expects to reveal “many more HOAs being converted into final [offtake] agreements,” Van Driel said, without disclosing the names of the companies or a timeline for the agreements.

Adnoc Gas ramps up spending to USD 15 bn, to pour heavily in infrastructure: The company has raised its five-year capex plan to USD 15 bn, up from an earlier USD 13 bn, to fund projects “which will enable us to capture opportunities from the forecast increase in domestic and global demand for the lower carbon gasses we produce,” says Alebri. The expanded spending plan will be “very much focused on new infrastructure,” according to Van Driel.

REFRESHER- In April, Adnoc Gas revealed its plan to invest USD 13 bn over the next five years in both domestic and international markets to help the firm expand its processing capacity and reach more customers.

Demand growth is behind the move: Adnoc Gas has ramped up capex plans to meet an expected 6% annual growth in demand through 2030, up from the initial projection of 2%, as the UAE’s GDP and population continue to expand alongside rising sectors like AI data centers and key industries. This increase in spending aims to boost EBITDA by 40% by 2029, enabling Adnoc to “process more raw gas from our supplier and sell it into the UAE market or export markets,” said Van Driel.

EARNINGS WATCH-

Adnoc Gas reported a 11% y-o-y increase in its net income, reaching USD 1.2 bn in 3Q 2024, according to its financials (pdf). The robust performance came higher than analysts’ expectation of USD 1.19 bn. The Adnoc subsidiary’s revenues climbed 8% y-o-y to USD 6.3 bn in 3Q, surpassing USD 6 bn for the fourth quarter thanks to “higher sales volumes and an improved price environment for export-traded liquids,” the company said in its earnings release (pdf).

On a nine-month basis, Adnoc Gas’ bottom line increased 18% y-o-y to USD 3.6 bn in 9M 2024. The company booked USD 18.4 bn in revenues, up 12% y-o-y in 9M 2024, achieving the strong revenue growth despite the mixed pricing environment, according to its earnings report (pdf). The revenue growth was underpinned by a 6.5% increase in export and traded liquids volumes, a 4.5% rise in gas sales, and a 3.5% growth in domestic gas volumes, the company said in its earnings release.

Looking ahead, Anoc Gas will focus on three major projects due by 2029, namely the Ruwais LNG project, alongside the “the Maximization of Ethane Recovery and Monetization (MERAM) project, which will deliver up to 3.4 mtpa of ethane and NGL production capacity [and] the IGD-E2 project, which will have a [daily] gas processing capacity of 370 mn standard cubic feet.”

Dividends: Adnoc Gas will distribute USD 3.4 bn in dividends for its 2024 earnings. This includes interim dividends of USD 1.7 bn, set to be distributed in April 2025.

Air Arabia posts bottom line growth in 3Q 2024

Budget carrier Air Arabia saw its bottom line increase 8% y-o-y to AED 564 mn in 3Q 2024 on the back of expanded operating capacity and an increase in routes, according to an earnings release (pdf). The airline’s topline rose 10% y-o-y during the period to AED 1.8 bn.

On a nine-month basis, Air Arabia’s net income fell 5% y-o-y to AED 1.3 bn in 9M 2024. The company’s revenues rose 12% y-o-y to AED 5 bn, driven by strong passenger demand, with over 14 mn passengers traveling with Air Arabia during the period, marking a 13% y-o-y increase.

Qatar Energy inaugurates four new LNG vessels

ENERGY-

Qatar Energy onboards four LNG carriers: Qatar Energy has inaugurated four new liquefied natural gas (LNG) vessels developed at the Samsung Heavy Industries (SHI) and Hanwha Ocean shipyards in South Korea, according to a statement. This marks the second set of vessels that have been named in Qatar Energy’s new fleet, following the Rex Tillerson and the Umm Ghuwailina at the Hudong-Zhonghua Shipyard in Shanghai back in September, Offshore Energy reported last week. The six-vessel order brings the tally to 128, including 24 QC-Max mega vessels.

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PORTS-

Egypt to continue lease for regasification unit in Aqaba port: Egypt and US-based maritime company Energos Infrastructure have reached an agreement to continue leasing for the floating regasification unit currently located in Jordan’s Aqaba Port and shared with the Jordanian government, CNN Business Arabic reports. The existing lease with the Jordanian government is set to expire at the beginning of 2025.

OTHER STORIES WORTH KNOWING THIS MORNING-

Air Arabia launches new Egypt-Kuwait route: The UAE’s Air Arabia is launching three weekly flights between Cairo International Airport and Kuwait International Airport starting 14 January 2025. (Statement)
Edge Group’s shipbuilding arm to implement OSI’s navigation systems at its vessels: Edge Group’s subsidiary Abu Dhabi Ship Building tapped OSI Maritime Systems, a Canadian provider of naval navigation solutions, to implement the latter’s navigation systems at its RABDAN FA-400 fleet. (Statement)

Market concerned over potential impact of Trump tariffs on Asia

The US’s potential tariff hike under Trump threatens several Asian players other than China, including South Korea, Taiwan, and Vietnam, Goldman Sachs tells CNBC. The US bilateral trade deficit with China has somewhat decreased since the Trump administration; however, deficits with other Asian exporters have risen considerably and may face greater scrutiny, according to Andrew Tilton, Goldman Sachs' chief Asia-Pacific economist.

India, Japan also at risk: “With Trump and some likely appointees focused on reducing bilateral deficits, there is a risk – in a sort of ‘whack-a-mole’ manner – burgeoning bilateral deficits could eventually prompt US tariffs on other Asian economies,” Tilton said. India and Japan, which run trade surpluses with the US, could also be at risk, he went on to say. Asian countries could attempt to lower existing trade surpluses with the US and “deflect attention” via various means, such as shifting imports to the US.

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Open economies should watch out: Trump's proposed tariffs are expected to cause “greater pain” to more open economies in the region, with Taiwan being more vulnerable to this impact than Korea or Singapore, according to Barclay Bank economists. “We see Thailand and Malaysia in the middle, with Thailand estimated to take a slightly larger hit,” the note added.

Europe is also assessing how it can contain or counter the tariffs, CNBC reports. Economists warn that it remains uncertain whether Trump’s tariffs on Europe will be “as damaging as feared,” as noted by ING economists in a report last Friday, or if they will merely serve as “a bargaining chip designed to unlock wider foreign policy deals.” Nevertheless, there have been calls in Europe for the bloc to start preparing retaliatory actions, with the director of Germany’s Ifo Center for International Economics urging the EU to "strengthen their position through their own measures."

Canada’s Montreal port lockout begins: Canada’s Maritime Employers Association (MEA) has declared a lockout at Montreal Port, after 99.7% of Montreal Longshoremen’s union members rejected a final offer made for a new labor contract, Reuters reported. The offer included a 3% salary increase per year over four years and a 3.5% increase over the two subsequent years. All longshoring at the port will be locked out effective last night, with only essential services unrelated to longshoring to continue.

REMEMBER- Unionized workers launched a strike last week at two Termont-run terminals at Montreal Port, which are responsible for handling 40% of the port’s container traffic.

The offer was rejected due to the MEA’s refusal to negotiate, says the union. “If the MEA had respected the collective bargaining process, solutions would have been found and a conflict at the Port of Montreal would have been avoided,” said union adviser Michel Murray in a statement cited by the newswire. The lockout is set to impact some 1.2k port workers and slow Canadian exports and imports. The port handled some 8.7 mn metric tons in 3Q 2024 alone.

Calendar

NOVEMBER

11-12 November (Monday-Tuesday): World Advanced Manufacturing Logistics Summit & Expo, Riyadh, Saudi Arabia.

11-12 November (Monday-Tuesday): Saudi Airport Exhibition, Riyadh, Saudi Arabia.

13-15 November (Wednesday-Friday): The Bahrain International Airshow, Sakhir Airbase, Bahrain.

13-15 November (Wednesday-Friday): ITC North-South - New Horizons, Astrakhan, Russia

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck Show, Damman, Saudi Arabia.

19-21 November (Tuesday-Thursday): Saudi International Maritime Forum, Dammam, Saudi Arabia.

18-19 November (Monday-Tuesday): G20 Summit, Rio de Janeiro, Brazil.

20-21 November (Wednesday-Thursday): Saudi Rail Exhibition, Riyadh, Saudi Arabia.

29 November (Friday): Egypt and Italy to launch a ro-ro shipping line connecting Damietta Port with Port of Trieste.

DECEMBER

2-3 December (Monday-Tuesday) Wings of Change Middle East, Riyadh, Saudi Arabia.

10-11 December (Tuesday-Wednesday): Rail Industry Summit, Casablanca, Morocco.

10-12 December (Tuesday-Thursday): Middle East Business Aviation, Dubai, UAE.

20 December (Wednesday): The Iran-Senegal Joint Economic Cooperation Commission, Dakar, Senegal.

EVENTS WITH NO SET DATE

IATA Annual General Meeting (AGM) and World Air Transport Summit, New Delhi, India.

1H 2024: Civil Construction subcontracts for construction firms in Oman for implementation of the Abu Dhabi - Suhar rail link to be announced.

2H 2024: Bahri’s barges for Saline Water Conversion Corporation (SWCC) to begin initial and commercial operation.

King Salman Energy Park is set to become operational.

The Cross-Border Digital Trade Forum, Dubai.

2025

2Q 2025: ICAO Facilitation Conference 2025 (FLAC 2025), Dohar, Qatar.

FEBRUARY

4-5 February (Tuesday-Wednesday): Seatrade Maritime Qatar, Doha, Qatar.

APRIL

16-17 April: Global Ports Forum, Dubai, UAE.

Mid-2025: Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

AD Ports-operated Safaga Port’s multi-purpose terminal will become operational.

Phase 3 of APM Terminals Tangier MedPort to be complete and operational.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

1Q 2025: Phase twoof Jafza Logistics Park to be completed.

NOVEMBER

4-6 November: The International Air Cargo Association TIACA’s Air Cargo Forum 2025, Abu Dhabi, UAE.

2026

2026 UNCTAD Global Supply Chains Forum, Saudi Arabia.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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