The ADNOC entity charted its way through a tough operating environment to deliver the $4 billion plus net income. Image Credit: Shutterstock

Dubai: ADNOC Gas closed 2023 with revenues of $22.73 billion, while net income came to $4.72 billion in what the UAE energy company says shows its 'resilient business model'. The net income includes a non-recurring item of $298 million from recognizing a deferred tax income in the first quarter of 2023.

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In 2022, the company's revenues totaled $25.78 billion and for net income to come to $4.79 billion.

The results also reflect the gains from 'export of higher-margin liquids' and 'focus on increased efficiency'. The  EBITDA margin of 33 per cent was deemed 'robust', especially in a 'volatile market environment coupled with consumer and geo-political pressures'.

ADNOC Gas confirmed dividends of $3.25 billion for the full-year, of which an 'inaugural' interim cash dividend of $1.625 billion was paid in December 2023 and a further $1.625 billion to be paid in second quarter of 2024. Following this, the company expects annual dividend growth of 5 per cent per share over the next four years, 'underscoring the strength and visibility of ADNOC Gas’ future cash flows'.

Maintain margins

"Our strong performance is a testament to the resilience of the company and our ability to maintain strong margins through the commodity cycle," said Dr. Ahmed Alebri, CEO of ADNOC Gas. "In 2023, we made substantial investments to drive our growth strategy, awarding EPC contracts totaling $4.9 billion, paving the way for significant capacity expansion.

"ADNOC Gas sustained its strong sales momentum during the year, signing new LNG supply agreements valued between $9 billion and $12 billion, capitalizing on the growing global demand for LNG as a transitional fuel. Our strong performance across the entire business enabled us to exceed our 2023 targets as per our guidance to the market.”

ADNOC Gas delivered a strong set of results in 2023, overcoming a challenging market environment in the first-half of the year

- Dr. Ahmed Alebri of ADNOC Gas

Less favourable pricing environment

Brent crude prices in 2023 were 18 per cent lower year-on-year. Spot Asian LNG, LPG and Naphtha prices had declined 53 per cent, 22 per cent and 17 per cent against the year before.

On 2023 profit tally, the company said that despite a revenue decrease, the 'impact was largely offset by the reduction of feedstock costs, which fell by $2,046 million, and a reduction in taxes by $593 million'.

Lower costs help

At the same time, ADNOC Gas' cost of goods sold dropped 14 per cent from $15.12 billion, benefiting from the gas supply and payment agreement (GSPA) with ADNOC Upstream. The 25-year contract allows ADNOC Gas to 'share in any price upside while also providing downside protection in a less favorable price environment'.