ADNOC Distribution posts strong growth in H1

ADNOC Distribution, the largest fuel and convenience retailer in the UAE, has announced that its earnings and revenue for the first half of the year have experienced substantial growth, primarily due to increased fuel volumes and operational efficiencies.

In the period from January to June, the company's revenue saw a rise of 4.9 per cent compared to the previous year, reaching AED 16.13 billion. The announcement was made in a statement to the Abu Dhabi Securities Exchange, where the company's shares are traded.

Moreover, the company's core earnings before interest, taxes, depreciation, and amortisation (EBITDA) witnessed a surge of 9 per cent year-on-year, reaching AED 1.57 billion.

Bader Al Lamki, the Chief Executive of ADNOC Distribution, attributed the higher earnings to the company's robust operational performance and its initiatives to enhance efficiency across various segments. He expressed confidence in the company's ability to achieve its yearly objectives in terms of operational expense reduction and both local and international network expansion. He further anticipated that this growth momentum would continue into the latter half of the year.

The company emphasised that its financial position remains robust, boasting a liquidity of AED 4.7 billion by the end of June.

Despite the positive trajectory, the net profit attributable to equity holders experienced a decline of 30.3 per cent on an annual basis, amounting to over AED 1.08 billion in the first half of the year. The dip was attributed to a decrease in EBITDA, stemming from significantly lower inventory gains compared to the first half of the previous year.

However, when excluding inventory movements, net profit for the first half actually increased by 2.1 per cent to AED 1.03 billion. The growth was supported by factors such as volume expansion, a heightened contribution from the non-fuel retail sector, and overall efficiency enhancement initiatives.

The second quarter of the year saw a decrease of 38 per cent in net income, settling at AED 551 million, while revenue dropped from AED 8.63 billion to AED 8.13 billion in the same period the previous year.

ADNOC Distribution experienced a substantial 9 per cent growth in total fuel volumes across the UAE and Saudi Arabia during the initial half of the year.

Within this context, retail fuel volumes, which constitute approximately 70 per cent of the total, recorded an 8 per cent year-on-year increase. The company's corporate fuel volumes also demonstrated impressive growth, boasting a 12 per cent yearly expansion. This was attributed to strategic efforts by the management to fortify the commercial business portfolio.

Furthermore, the company's non-fuel business remained strong, evidenced by a gross profit increase of over 12 per cent in the first half of the year. This growth was primarily driven by a 14 per cent surge in transactions and the achievement of a record-high conversion rate within its convenience stores.

ADNOC Distribution has announced its intention to distribute a dividend of AED 1.28 billion for the first half of the year, pending board approval and in accordance with its dividend policy. This policy, which was ratified at the general assembly meeting in March, sets a minimum dividend target of AED 2.57 billion for the year 2023.

Meanwhile, ADNOC Gas announced its financial results for the three months and six months ended 30th June, 2023 (Q2 2023) and (H1 2023).

The Company’s H1 2023 revenue stood at a AED 38.9 billion compared to Pro Forma Adjusted Revenue of AED 48.8 billion in H1 2022, impacted by the pricing environment.

ADNOC Distribution delivers strong operating performance and growth in underlying profitability in H1 2023 to to AED1.57 billion#WamNews https://t.co/dRyaceAjCd pic.twitter.com/4B8JxNHbza

— WAM English (@WAMNEWS_ENG) August 4, 2023