Adnoc Distribution registers record $1 billion Ebitda in ‘transformative’ 2023

UAE’s largest fuel and convenience retailer recommended distributing a dividend of $350 million

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Ashwani Kumar

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Published: Wed 7 Feb 2024, 7:11 PM

Adnoc Distribution recorded a 4.6 per cent year-on-year growth in earnings before interest, tax, depreciation and amortisation (Ebitda) to $1.002 billion (Dh3.68 billion).

The UAE’s largest fuel and convenience retailer, listed on the Abu Dhabi Securities Exchange (ADX), successfully delivered on the five-year target set during its first Capital Markets Day in May 2019.

Bader Saeed Al Lamki, CEO of Adnoc Distribution, noted that 2023 was a remarkable and transformative year for the company, driven by record Ebitda of more than $1 billion.

“Our team delivered on a critical commitment made to capital markets, underpinned by our focus on execution excellence, future-proofing the business, unwavering dedication to health safety and environment, and by our capability building and cultural transformation. This achievement is underscored by our focus on execution excellence and future-proofing the business.”

In addition, the underlying Ebitda for 2023, excluding the impact of inventory movements, increased by 15.4 per cent year-on-year led by a double-digit surge in fuel volumes and non-fuel business, along with a rising contribution from international operations. The Ebitda benefited from the company’s efficiency improvement initiatives, leading to like-for-like operating expenditure (opex) savings of $28 million.

Adnoc Distribution capitalised on new opportunities in both domestic and international markets by strategically allocating capital for growth. In 2023, the company generated a strong free cash flow of $1.1 billion.

Al Lamki noted that the company’s board of directors has approved a new five-year strategy for 2024-28, targeting the next phase of growth with a focus on sustainable mobility and convenience.

“It includes optimising existing assets to improve our profitability, doubling down on non-fuel retail, and generating new revenue streams offered by energy transition to future-proof our business and increase customer satisfaction. I look forward to sharing more details about our five-year strategy during the upcoming Capital Markets Day.”

Double-digit growth

The company’s total fuel volumes recorded an 11.8 per cent year-on-year growth in 2023 in the GCC markets, with retail volumes growing by 9.6 per cent and commercial volumes up by 16.2 per cent year-on-year. This growth was underpinned by its ongoing network expansion, sustained momentum in the region’s economic growth, and higher mobility.

Adnoc Oasis convenience store sales continued to gain momentum in 2023, with non-fuel retail transactions increasing by 12.9 per cent year-on-year.

Initiatives like innovative AI-enabled ‘Fill and Go’ technology, payment device standardisation, and enhancement of the Adnoc Distribution mobile app, led to the company achieving a four-year-high convenience store conversion rate of 24.7 per cent, up from 21.7 per cent in 2022, supporting cent year-on-year non-fuel gross profit growth of 19.6 per cent.

The company surpassed its target of opening 25-35 new stations in 2023 by launching 41 new service stations, bringing its total network to 840 service stations, of which 597 are located in the UAE and Saudi Arabia.

Returns to shareholders

The company’s board of directors has recommended distributing a dividend of $350 million, equivalent to 10.285 fils per share, for the second half of 2023. Subject to shareholders’ approval, the total dividend for the fiscal year 2023 is expected to be $700 million, equivalent to 20.57 fils per share, providing an annualised yield of 5.8 per cent.


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