Abu Dhabi Ports Co PJSC (ADX:ADPORTS) ROC % : 3.81% (As of Mar. 2024)

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What is Abu Dhabi Ports Co PJSC ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Abu Dhabi Ports Co PJSC's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 3.81%.

As of today (2024-05-26), Abu Dhabi Ports Co PJSC's WACC % is 8.07%. Abu Dhabi Ports Co PJSC's ROC % is 3.30% (calculated using TTM income statement data). Abu Dhabi Ports Co PJSC earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Abu Dhabi Ports Co PJSC ROC % Historical Data

The historical data trend for Abu Dhabi Ports Co PJSC's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Abu Dhabi Ports Co PJSC ROC % Chart

Abu Dhabi Ports Co PJSC Annual Data

Trend

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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5.31

4.80

4.14

4.78

3.54

Abu Dhabi Ports Co PJSC Quarterly Data
	Dec18	Dec19	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial											4.33	3.81	4.41	0.98	3.81

Abu Dhabi Ports Co PJSC ROC % Calculation

Abu Dhabi Ports Co PJSC's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	1620.156 * ( 1 - 3.58% )	/	( (37950.111	+	50388.379)	/ 2 )
=	1562.1544152	/	44169.245
=	3.54 %

where

	Invested Capital		(A: Dec. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	38511.991	-	1197.281	-	( 790.822	-	max(0, 4995.798	-	4360.397	+	790.822	))
=	37950.111

	Invested Capital		(A: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	55610.989	-	1867.893	-	( 3354.717	-	max(0, 5780.677	-	9864.851	+	3354.717	))
=	50388.379

Abu Dhabi Ports Co PJSC's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	2308.876 * ( 1 - 13.33% )	/	( (50388.379	+	54534.933)	/ 2 )
=	2001.1028292	/	52461.656
=	3.81 %

where

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	55610.989	-	1867.893	-	( 3354.717	-	max(0, 5780.677	-	9864.851	+	3354.717	))
=	50388.379

	Invested Capital		(Q: Mar. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	58253.501	-	2044.998	-	( 1673.57	-	max(0, 6923.984	-	9816.718	+	1673.57	))
=	54534.933

Note: The Operating Income data used here is four times the quarterly (Mar. 2024) data.

Abu Dhabi Ports Co PJSC (ADX:ADPORTS) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Abu Dhabi Ports Co PJSC's WACC % is 8.07%. Abu Dhabi Ports Co PJSC's ROC % is 3.30% (calculated using TTM income statement data). Abu Dhabi Ports Co PJSC earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Abu Dhabi Ports Co PJSC ROC % Related Terms

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Abu Dhabi Ports Co PJSC (ADX:ADPORTS) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » Abu Dhabi Ports Co PJSC (ADX:ADPORTS) » Definitions » ROC %

Traded in Other Exchanges

N/A

Address

Al Mina Street. Nearest Landmark: Zayed Port, Gate 1, Next to Zayed Port, P.O. Box 54477, Abu Dhabi, ARE, 54477

Website

https://www.adports.ae

Abu Dhabi Ports Co PJSC owns, operates, maintains, manages, and develops all ports, docks, harbors, quays, waterways, bridges, breakwaters, infrastructure, and related installations in the Emirate of Abu Dhabi. It also constructs, manages, and develops the industrial, commercial, and non-financial service-free zones on plots of land granted or allocated by the Government of Abu Dhabi. The company's segments include Ports; Economic Cities and Free Zones (EC&FZ); Logistics; Maritime; Digital and Corporate.

Abu Dhabi Ports Co PJSC (ADX:ADPORTS) Headlines

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