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ADNOC Distribution's top- and bottom-line numbers have been boosted by the steady rollout of new fuel and convenience store locations. Image Credit: Supplied

With a market cap of Dh53.12 billion, UAE's most significant fuel and convenience retailer, ADNOC Distribution, reported revenues of Dh14.69 billion for the first nine months of 2021. This is 22.6 per cent up from the same period in 2020, driven by higher selling prices of fuel as well as fuel and non-fuel business growth.

Net profit was Dh1.68 billion, a gain of 6.3 per cent. The company's gas volumes have gradually recovered to pre-Covid levels, indicating that consumer confidence has improved. The fuel retailer had a solid financial position at the end of September, with Dh5.9 billion in liquidity, including Dh3.1 billion in cash and cash equivalents, Dh2.8 billion in unutilized credit facility, and Dh1.77 billion in free cash flow.

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Deals and additions

Furthermore, ADNOC Distribution recently announced a five-year exclusive partnership with Cars Taxi, underlining its commitment to its expansion and diversification plan. It will be the sole supplier of fuel and lubricants for Cars Taxi's 3,000 plus fleet in the UAE, which is expected to spur ADNOC's top- and bottom-line.

The retailer’s UAE network reached 459 stations as of September 30. In addition, there were 14 stations that opened in the UAE during the period, of which five were in Dubai. As a result, the Dubai service station network has grown to 31. These have helped the company gain market share in Dubai, with September gasoline volumes more than doubling compared to the same period last year.

In addition to its sustained expansion in the UAE, the company implements its ambitions in Saudi Arabia, with 10 additional stations as of November 8 and bringing its total network in Saudi Arabia to 12.

Hooked to wider economy

The UAE aims to double FDI inflow and thus enabling business volumes to explode and attract more tourism. This implies fuel and non-fuel consumption could return to pre-pandemic levels. ADNOC Distribution appears well-positioned to capitalize on the upturn, spearheaded by expansion in the UAE and other GCC countries. The group has a dividend yield of 4.83 per cent.