Adnoc Distribution 9-month profit climb to Dh1.7 billion as fuel volumes recover

The company paid an interim dividend for the first six months of 2021 of Dh1.285 billion in October 2021



Photo: File
Photo: File
by

Muzaffar Rizvi

Published: Tue 9 Nov 2021, 9:34 AM

Adnoc Distribution on Tuesday said it earned Dh1.7 billion net profit during the first nine months of 2021 as the recovery in fuel volumes strengthen following the easing in travel restrictions and the successful vaccination drive across the UAE.

In a statement, the Abu Dhabi-listed UAE’s largest fuel and convenience retailer reported Dh529 million net profit for the July- September quarter while its EBITDA for the nine months and the third quarter stood at Dh2.3 billion and Dh737 million, respectively.

Continued business resilience

The company continues to see recovery with September total fuel volumes increasing by 10.6 per cent compared to August, following the easing in travel restrictions, the successful vaccination drive across the UAE, government entities now 100 per cent back to office, and schools return to face-to-face learning. It is expected that these volumes will continue to increase going into fourth quarter, the statement said.

In addition, Adnoc Distribution has continued to see incremental volumes from its Dubai stations, with a total of 31 stations now in operation in the emirate and a total network of 459 stations across the UAE as of September 30, 2021.

The company’s commercial business has continued to implement a proactive sales strategy, including continued international expansion of its Adnoc Voyager lubricants, with new distributors added in the third quarter of 2021 and export volumes at double 2020 levels year to date.

The company’s non-fuel business continues to show improvement with gross profit increasing by 4.3 per cent in the third quarter of 2021 compared to the same period in 2020, underpinned by convenience stores refurbishment program alongside attractive promotions via Adnoc Rewards program.

Operationally, as part of its ongoing transformation, the company remains committed to reducing operating costs and ensuring competitiveness in the UAE fuel retail and convenience store sector. The company's ’s operational expenditure (excluding depreciation) decreased by 17.8 per cent compared to the first nine months in 2020, despite growth in network.

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Continued commitment to smart growth

Adnoc Distribution inaugurated 14 new stations in the UAE during the first nine months of 2021. In addition, its Adnoc Oasis refurbishment program has seen 35 stores renovated in the UAE, offering fresh food, barista-brewed coffee and a wider menu selection.

Saudi Arabia operations

The company received no objection certificates from the Saudi General Authority for Competition (GAC) to acquire 35 stations in Saudi Arabia. The company has continued to execute on its plans in the kingdom, with 10 new stations added as of 8 November 2021 and total of 40-45 new stations to open in 2021.

Engineer Bader Saeed Al Lamki, chief executive officer, Adnoc Distribution said the company presents a compelling investment story as today’s results show.

"The green shoots of recovery are here and accelerated growth is clear to see. We will continue to deliver on our expansion plans, domestically and internationally, which positions us as an even stronger fuel and convenience retail leader in the UAE and cements our place as a global fuel retailer," Al Lamki said.

“We maintain a robust balance sheet and continue to bring new innovations to the market which demonstrate exceptional customer experience. Looking ahead, we expect our growth trend to accelerate driven by strengthening economic recovery and an increase in visitors heading into holiday season, Expo 2020 and a number of sporting events being hosted by the UAE,” he added.

Attractive shareholder proposition

Following Adnoc Distribution’s inclusion in MSCI Emerging Markets Index in May 2021, the company was also included in the FTSE Emerging Markets (EM) Index in September 2021. The inclusion in these reputable indices is expected to increase the attractiveness of Adnoc Distribution’s shares to potential international investors and thus further diversifying the company’s investor base.

In September, Adnoc Distribution announced that its board of directors had approved an interim dividend payment to shareholders for the first six months of 2021 of Dh1.285 billion (10.285 fils per share), equivalent to $ 350 million, which was paid in October 2021. This was the first payment in what is expected to be a full-year 2021 dividend payment of Dh2.57 billion (Dh20.57 fils per share), consistent with the company’s dividend policy.

--- muzaffarrizvi@khaleejtimes.com


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