Abu Dhabi: ADNOC Distribution, the UAE’s largest fuel and convenience retailer, announced today the approval of an interim dividend payment to its shareholders for the first six months of 2020 of Dh1.285 billion (10.285 fils per share), equivalent to $350 million, approved at a meeting of the Board of Directors on 29 September 2020.
This is the first payment in what is expected to be a full-year 2020 dividend payment of Dh2.57 billion (AED 20.57 fils per share), reflecting a 7 per cent increase compared to last year’s dividend of AED 2.39 billion (19.10 fils per share).
During its General Assembly meeting in March 2020, the company announced an amendment to its dividend policy for 2021 onwards, setting an Dh2.57 billion dividend for 2021 and a dividend equal to at least 75% of distributable profits from 2022 onwards, subject to the discretion of the Board of Directors and the approval of shareholders.
ADNOC Distribution expects to continue to pay half of the annual dividend in October of the relevant year and half in April of the following year. The new dividend policy demonstrates the company’s strong record of progressively increasing its dividends to its shareholders. As per the approved policy, the second and final dividend for 2020 is expected to be paid in April 2021, subject to the Board of Directors’ recommendation and shareholders’ approval.
Despite the challenging operating environment the company has accelerated delivering on its strategic smart growth plans by opening 37 new stations in the UAE, as at end of September 2020, a seven times increase in new station openings when compared to last year, and remains on-track to deliver 50-60 new stations by full year 2020, including 20-25 new stations in Dubai.
“Our progressive dividend policy demonstrates our commitment to our shareholders as we advance our strategic priorities of steady and sustainable growth, enhanced customer experience and attractive capital returns for our shareholders. With our resilient business model offering stable and predictable cash flows and low exposure to oil price volatility, we are confident in our ability to pay a generous dividend to our shareholders, while also maintaining significant capacity to deploy capital through a disciplined investment strategy,” said Ahmed Al Shamsi, Acting Chief Executive Officer of ADNOC Distribution.
Strong balance sheet
ADNOC Distribution maintains a strong balance sheet and remains well positioned to expand both its domestic and international portfolio in line with its smart growth strategy. As at 30 June 2020, ADNOC Distribution held Dh2.4 billion in cash and cash equivalents (including term deposits) and AED 2.8 billion in its unutilized revolving credit facilities. Although the COVID-19 pandemic caused unprecedented market conditions in the first half of the year, the Company demonstrated a resilient and steadfast focus on smart growth, delivering a 7.6% increase in underlying EBITDA for the first six months of 2020, compared to the first half of 2019.