Nakilat Q1 2025 presentation: 3.2% profit growth amid fleet expansion plans

Qatar Gas Transport Company (QSE:QGTS), known as Nakilat, reported a 3.2% year-over-year increase in net profit to QAR 433 million ($119 million) for the first quarter of 2025, according to its investor presentation released on April 30. The profit growth came despite a 1.6% decrease in total income to QAR 1.11 billion, demonstrating the company’s operational efficiency and cost management.

Financial Performance Highlights

Nakilat achieved its profit growth through a combination of higher revenue from wholly owned vessels, lower operating expenses, and reduced finance costs. The company’s revenue from operations increased by 0.7% to QAR 1.08 billion, while operating costs decreased by 3.8% to QAR 184 million due to cost optimization initiatives.

As shown in the following financial highlights chart:

The company reported an EBITDA of QAR 912 million, representing a slight decrease of 1.0% compared to the same period last year. Finance charges saw a significant reduction of 12.9% to QAR 258 million, primarily due to the repayment of loans. The company maintained a healthy return on equity of 13.6% and a current ratio of 1.22.

The income statement breakdown reveals the sources of Nakilat’s improved profitability:

Nakilat’s balance sheet remains robust with cash and deposits increasing by 5.1% to QAR 2.75 billion. The company’s borrowings decreased slightly by 0.3% to QAR 19.40 billion, continuing a general downward trend in net borrowings since 2016:

Strategic Fleet Expansion

Nakilat outlined ambitious fleet expansion plans designed to capitalize on projected growth in global LNG demand. The company currently operates 69 LNG carriers, 2 LPG carriers, and 1 FSRU, but has ordered an additional 40 vessels including 27 conventional LNG carriers, 9 QC-MAX carriers, and 4 LPG/ammonia carriers.

"Our fleet expansion strategy is accelerating to meet future demand," the company stated in its presentation. Once all vessels are delivered, Nakilat’s total fleet will reach 112 vessels, significantly strengthening its position as one of the world’s largest LNG shipping companies.

The company’s investment proposition highlights its strong market position:

Dividend Performance

Nakilat has maintained a consistent dividend policy, distributing a total cash dividend of 14 Qatari Dirhams per share for 2024, unchanged from 2023 but representing a 40% increase from 2017 levels. The dividend history demonstrates the company’s commitment to shareholder returns:

LNG Market Outlook

The presentation provided a comprehensive overview of the LNG shipping market, highlighting projected growth in global liquefaction capacity. According to Nakilat, global LNG liquefaction capacity is expected to increase by 64% by 2030, reaching 673 MTPA (million tonnes per annum) from the current 411 MTPA.

This industry growth projection underpins Nakilat’s fleet expansion strategy:

However, the company also noted challenging market conditions in the short term, with significant decreases in average spot charter rates in Q1 2025 compared to Q4 2024. MEGI vessel rates declined by 40%, DFDE vessel rates fell by 51%, and steam vessel rates dropped by 70%.

Safety Performance

Nakilat emphasized its commitment to health and safety, reporting strong performance metrics and highlighting recognition from the British Safety Council:

Forward Outlook

Nakilat expressed confidence in its medium-term outlook, citing its strategic fleet expansion and the projected growth in global LNG demand. The company’s high contract backlog of 865 years for firm contracts plus 585 years of option periods provides substantial visibility on future earnings.

The company summarized its position with the following key points:

With Qatar Gas Transport Company shares trading at QAR 4.677 as of April 29, 2025, down 2.01% according to available market data, investors appear to be weighing the company’s strong fundamentals against challenging short-term market conditions in the LNG shipping sector.

Full presentation:

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