ADNOC Distribution reports 2% year-on-year increase in net profit excluding inventory movements to Dh1.03b

Dubai: ADNOC Distribution on Friday reported a 2 per cent year-on-year increase in net profit excluding inventory movements to Dh1.03 billion.

UAE fuel retailer said in a stock market filing said that it expects to pay Dh1.28 billion dividend for H1-2023 in October, subject to boad approval and in line with its dividend.

The company reported a 9 per cent year-on-year increase in underlying EBITDA, reaching Dh1.57 billion in H1-2023. The net profit, excluding inventory movements, also grew by 2 per cent year-on-year, amounting to Dh1.03 billion, driven by higher fuel volumes and efficiency improvements across the company.

Total fuel volumes in the UAE and Saudi Arabia surged by 9 per cent in H1-2023 compared to H1-2022. Retail fuel volumes, which make up about 70 per cent of the total, experienced an 8 per cent year-on-year increase. The corporate fuel volumes surged 12 per cent year-on-year increase, thanks to strategic efforts to strengthen the commercial business portfolio.

Non-fuel business

The Company’s non-fuel retail business’ gross profit surged more than 12 per cent year-on-year in the first half of the year, driven by a 14 per cent increase in transactions and achieving a record-high conversion rate in convenience stores. Management's initiatives to boost food and beverage sales, offer customer-centric solutions in line with the non-fuel strategy, and introduce innovative products and services contributed to this growth.

ADNOC Distribution leveraged AI and data analysis to enhance the customer experience, leading to personalized offers through the ADNOC Rewards program, which now boasts over 1.7 million members. Additionally, the company revitalized ADNOC Oasis convenience stores, refurbishing five stores in the first half of the year.

“As a future-focused business, we remain on track to meet targets for the year in OPEX savings and network expansion locally and internationally, and expect this growth momentum to continue into the second half of the year,” said Eng. Bader Saeed Al Lamki, CEO of ADNOC Distribution. “Supported by our firm belief in our smart growth strategy while embarking on our transformational plans that focus on innovation and upgrading the customer experience, we remain committed to achieving sustainable growth and rewarding returns for shareholders in the long term.”

Delivering growth

ADNOC Distribution said it opened 13 new service stations in the UAE during the first half of 2023, including three in Dubai. The domestic network now stands at 511 service stations (with 42 in Dubai) as of June 30, 2023. The company aims to further expand its network by opening 25 to 35 new service stations by the end of the year.

In its international expansion efforts, ADNOC Distribution completed the acquisition of a 50 per cent stake in TotalEnergies Marketing Egypt in February 2023. The joint venture has successfully expanded its aviation fuels business by securing the right to supply aviation fuel to Etihad Airways for flights fueled in Cairo. Additionally, a new station was opened in the second quarter of 2023 in the fuel retail segment. ADNOC Distribution plans to open its first three branded ADNOC flagship service stations in Cairo during the third quarter of 2023.

The company's VOYAGER lubricants portfolio expanded to 32 export markets worldwide during H1-2023. ADNOC Distribution is actively exploring opportunities to enter new and growing lubricant markets through strategic collaborations with leading partners worldwide. Recently, the company signed an agreement with Hindustan Petroleum Corporation Limited (HPCL), one of India's largest players in the lubricant and fuel retailing sector, marking a significant milestone in its international expansion strategy and enhancing its presence in key lubricant markets worldwide.