ADNOC Gas warns Hormuz disruption to hit Q2 earnings after resilient Q1

Dubai: ADNOC Gas said on Tuesday it expects the ongoing disruption to maritime traffic through the Strait of Hormuz to weigh on second-quarter earnings, even as the company reported resilient first-quarter profit and maintained its long-term growth targets despite security incidents at its Habshan gas processing complex.

The Abu Dhabi-listed company reported net income of $1.1 billion for the first quarter of 2026, down 8% from the previous quarter, citing "increased regional uncertainty and difficult market conditions, which have caused major disruption in the energy sector and to maritime movements through the Strait of Hormuz."

Fatema Al Nuaimi, Chief Executive Officer of ADNOC Gas, said: “This quarter was shaped by exceptional external disruption, and our priorities were clear: protect our people and assets, maintain safe domestic supply, and protect shareholder value through disciplined execution. Our Q1 results demonstrate resilience, supported by rigorous cost management and a solid balance sheet.”

“As we manage the disruption to maritime movements through the Strait of Hormuz, the long-term foundations of ADNOC Gas remain intact,” Al Nuaimi said.

Shipping disruptions

The company said continued disruption to shipping through the Strait of Hormuz — a critical global oil and gas transit chokepoint — had affected cargo liftings of LNG and LPG products. ADNOC Gas said it had relied on inventory management, storage capacity and coordination with customers to continue fulfilling supply commitments where possible.

"The ongoing closure of the Strait of Hormuz is expected to affect ADNOC Gas’ Q2 net income, with projections indicating a range between $400 million and $600 million assuming maritime operations return to normal prior to the end of the quarter," the company said.

"On the assumption that the Strait is open for the second half of 2026, higher LNG and LPG prices, in line with the current Brent forward curve, are expected to help offset deferred volumes. ADNOC Gas anticipates full-year 2026 net income to range from $3.5 billion to $4.0 billion, with this outlook reflecting the expected impact of the second quarter."

The company ended the quarter with $4.2 billion in cash and generated $572 million in free cash flow. Its board approved a quarterly dividend of $941 million payable in June.

Habshan recovery

The company reaffirmed its policy of increasing dividends by 5% annually through 2030 and maintained its target of more than 40% EBITDA growth between 2023 and 2029.

ADNOC Gas' Habshan gas processing complex was hit by two security-related incidents on April 3 and April 8, prompting the activation of emergency and business continuity measures.

"Within a short period, 60% of the complex’s processing capacity was restored, and the Company is currently working toward achieving 80% restoration by the end of 2026, with full capacity restored in 2027," it said.

Domestic demand

The Habshan facility is one of the UAE’s largest gas processing hubs and plays a central role in supplying fuel to domestic power and industrial customers.

Despite some processing units remaining offline, ADNOC Gas said its wider network infrastructure had enabled it to substantially restore supply and continue meeting domestic demand.

The company said the first phase of its Rich Gas Development project would help reduce bottlenecks and support higher associated gas production following the easing of upstream production constraints.

ADNOC Gas also pointed to rising domestic industrial demand in the UAE as a long-term growth driver, citing the TA’ZIZ petrochemicals project and ADNOC’s broader local manufacturing investments under the “Make it in the Emirates” programme.