UAE fuel retailer ADNOC Distribution reworks dividend policy - $700m or 75% of net profit until 2028
UAE fuel retailer reworks shareholder payout policy for 2024-28
Dubai: As expected, ADNOC Distribution has won shareholder approval for a new 5-year dividend policy that will see the fuel retailer return $700 million or a minimum of 75 per cent of net profit - whichever is higher - to investors.
At the AGM, shareholders also approved distributing Dh1.28 billion in dividends for the second-half of 2023, equivalent to 10.285 fils per share. This is to paid in April and will bring the total for 2023 to Dh2.57 billion, 'yielding 5.6 per cent based on the share price of Dh3.66 on March 27'.
In 2023, the company reported net profits of Dh2.63 billion.
“ADNOC Distribution has provided shareholders with a 90 per cent return on their investment since its IPO in 2017 through increased market value and dividends," said Dr. Sultan Ahmed Al Jaber, Chairman. "And delivered on its promise of achieving $1 billion in EBITDA for 2023, setting the foundation for our next phase of accelerated growth.
“Based on our confidence in the new strategy and future prospects, we have introduced a more rewarding five-year dividend policy that provides long-term payback visibility and dividend upside from future earnings growth. Our new policy mirrors the company’s sustainable growth trajectory and predictable cash flow while demonstrating attractive shareholder returns.”
Accelerate growth
The new plans include higher contribution from international operations in Saudi Arabia and Egypt while 'exploring accretive growth opportunities'. This will be 'supported by a robust-balance sheet and strong cash flow generation'.
It will see the ADNOC entity work on 'additional sectors such as lubricants and LPG, new sustainable transport solutions, and exploring expansion opportunities in new global markets'.
"We aim to expand our network to 1,000 service stations by 2028, growing non-fuel transactions by 50 per cent and increasing convenience stores by 25 per cent," said Bader Saeed Al Lamki, CEO. "Additionally, we aim to strategically grow our electric vehicle infrastructure to more than 500 fast and superfast chargers by 2028, a 10-fold increase from 2023." (The company along with Abu Dhabi utility company is setting EV charging networks. This will be done through a JV called E2GO.)