Gulf Navigation Consider Acquiring Brooge Energy Limited

As part of its expansion plans, Gulf Navigation, the only listed maritime company on the Dubai Financial Market (DFM) offering services globally, is considering a proposal to acquire the companies and assets owned by the Cayman-based infrastructure provider Brooge Energy Limited.

Brooge is currently engaged in clean petroleum products and biofuels and crude oil storage and related services.

In a filing with the DFM on Tuesday, where Gulf Navigation’s shares are traded, the company said that the offer is directed to the real beneficiaries of the targeted group for acquisition. This decision was taken at a meeting of the company’s Board of Directors on Monday.

“The process of acquiring the aforementioned companies is still under study and negotiations; financial advisors and evaluators are still being selected to prepare the reports required by the company’s management, which will help them decide on the extent of the economic and financial feasibility of the transaction of acquiring the targeted group for acquisition,” Ahmed Kilani, the newly appointed CEO of Gulf Navigation, said in the filing.

“The expected effect of material information on the financial position and results of the company’s business and operations will be disclosed in due course, as the deal is currently under careful review,” Kilani said.

The company discussed the conditional offer to acquire Brooge Petroleum and Gas Investment and grant (BPGIC) and authorised Ahmad Kilani to sign the offer and appoint external advisors for studying and evaluating the acquisition in a way that achieves the highest levels of benefit and interest for the company’s financial position and the interests of its shareholders.

Brooge Energy is a leading oil storage and refinery company which conducts all of its business and operations through its wholly owned subsidiary Brooge Petroleum and Gas Investment Company (BPGIC).

BPGIC was founded on the premise of operating some of the most technologically advanced bulk liquid storage facilities in the world to ensure that all our customers – whether oil majors or smaller energy traders – benefit from minimal loss in time, money and end product volume and quality.

Safety, security, and careful handling of products is BPGIC’s core ethos and the company ensures that while it continues to facilitate the flow of energy, it does so without putting its people in harm’s way or endangering the ecosystem.

Strong Revenue Growth

Brooge Energy provided storage capacity of 1,001,388 cbm and related services to numerous oil traders and producers generating revenue of $81.5 million in 2022, a 95% year-over-year increase, as compared with $41.8 million in 2021. This increase is mainly attributable to the commencement of Phase II storage and services in September 2021, which were available during the year in 2022, as well as signing new contracts at higher storage rates.

Gross profit for 2022 totalled $56.8 million, an increase of 112%, as compared with $26.8 million in 2021. Gross profit margin improved by 70% in 2022 as compared with 64% in 2021.

For the year ending 31 December 2022 the company reported a net profit of $27.2 million or $0.31 per basic and diluted share, an increase of 6%, as compared with $25.7 million or $0.29 per basic and diluted share in 2021, predominately due to an increase in non-cash change in estimated fair value of derivative warrant liability, increase in general and administrative expenses, and increase in finance costs related to Phase 2 construction.