ADNOC Distribution
ADNOC Distribution has got optimum exposure in the UAE and now wants to build up its presence in Saudi Arabia. Image Credit: Supplied

Dubai: The Abu Dhabi fuel retailer ADNOC Distribution’s first-half 2021 net profit is a robust Dh1.15 billion, with forecasts of more solid returns to come in the second-half. Revenues of Dh9.30 billion represent a near 17 per cent gain over the same period last year.

“These results reflect our focused drive towards delivering on our strategy, and sustained progress in all of our strategic pillars - fuel, non-fuel and cost-efficiency,” said Bader Al Lamki, CEO of ADNOC Distribution. “We continue to make disciplined capital investments, achieving cost savings while growing our service station network, and maintaining high levels of safety, quality and customer experience.”

The company has also received approval from the Saudi authorities to acquire 35 service stations in the Kingdom, where ADNOC Distribution has plans for a wider exposure.

H1-2021 dividend payout in October
ADNOC Distribution expects to pay the first-half dividend – of 10.285 fils a share – in October. For the full year, the payout is set at Dh2.57 billion.

It was during its general assembly meeting in March last that the company announced an amendment to its dividend policy for 2022, setting a minimum of Dh2.57 billion dividend (compared to minimum 75% of distributable profits as per previous policy), providing visible payback to shareholders until April 2023.

The dividend policy for the years thereafter remains unchanged at a dividend equal to at least
75% of distributable profits.

Closing in on pre-COVID levels

Fuel volumes in Abu Dhabi have returned close to pre-COVID-19 levels, which is “an indication of improving consumer sentiment following the successful vaccination drive across the UAE”. There are “incremental” volume gains from its Dubai stations “alongside a proactive sales strategy in its corporate business”. “The company remains committed to reducing operating costs and ensuring competitiveness in the UAE fuel retail and convenience store sector,” it said in a statement. In the first-half of 2021, operational expenditure (excluding depreciation) was down by 10 per cent.

“ADNOC Distribution’s second quarter and half-year results further reinforce the company’s growth story and its strong standing within the fuel retail sector," the CEO said. "We have a steadfast focus to provide modern fuel retail convenience to customers, deliver on the company’s ambitious strategy, and build long-term shareholder value through the next phase of our growth."

ADNOC Distribution is one of nine UAE companies in the MSCI (Morgan Stanley Capital International) Emerging Markets Index. 

  1. In May, ADNOC announced a successful placement of approximately 375 million shares in ADNOC Distribution, representing an additional 3% of the registered share capital of the company.
  2. It also issued approximately $1.195 billion of senior unsecured bonds due 2024, exchangeable into existing shares of ADNOC Distribution, constituting approximately 7% of the registered share capital of ADNOC Distribution.
  3. Following the transactions, ADNOC will retain at least a 70% strategic stake as it continues to see significant growth potential in ADNOC Distribution.