Adnoc eyes India's lubricant market

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Adnoc incurred higher capital expenditure of Dh384 million in the first half of 2020, compared to Dh138 million in the corresponding period last year.
Adnoc incurred higher capital expenditure of Dh384 million in the first half of 2020, compared to Dh138 million in the corresponding period last year.

Dubai - Company intends to introduce fuel stations in Saudi Arabia to capture untapped growth

By Waheed Abbas

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Published: Sat 15 Aug 2020, 10:01 PM

Last updated: Sun 16 Aug 2020, 12:03 AM

Adnoc Distribution on Saturday said it is assessing potential opportunities in the Indian lubricant market as it is on track to expand its global footprint.
The UAE's largest fuel retailer said it aims to grow in Saudi Arabia organically and is in advanced discussions with partners in the kingdom, which is underdeveloped in terms of customer offerings.
Its first-half net profit slipped 22.4 per cent to Dh910 million due to a decline in UAE fuel sales during the lockdown. Its revenues fell 22.6 per cent from Dh10.2 billion to Dh7.9 billion.
"We are progressing well on our international expansion strategy. We are in advanced discussions with several counterparties including landlords and retail fuel operators in Saudi Arabia to grow organically, as well as continue to explore inorganic growth opportunities. We see the Saudi Arabian fuel market as large and fragmented with underdeveloped customer offerings," the company disclosed in its Management Discussion and Analysis Report released during second-quarter results.
The company intends to introduce fuel stations in the kingdom of Saudi Arabia to capture untapped growth.
"We are also assessing potential opportunities in the Indian lubricants market to achieve disciplined growth and operational success, while targeting the highest return on investment," said Adnoc Distribution.

25 new stations open
It operates 406 retail fuel stations as of June 30, 2020, including 13 fuel stations in Dubai. It opened 25 new stations across the country in the first half of 2020. It included 18 stations in the second quarter.
Adnoc also incurred higher capital expenditure (capex) of Dh384 million in the first half of 2020, compared to Dh138 million in the corresponding period last year.
"We expect 2020 capex to accelerate compared to 2019 as significantly higher number of new stations are expected to be delivered this year."
Adnoc Distribution also introduced mobile fuel delivery to its retail customers in select areas of Abu Dhabi to provide a convenient fueling service at no additional charge.
"During Q2 2020, we added 10 new trucks to our My Station fleet to expand on-demand fuel delivery service. by the end of first half of 2020, we have deployed eight fuel trailers and 32 fuel trucks to serve our commercial and retail customers," said Adnoc.
The company's like-for-like operating expenses also shrank by Dh26 million year-on-year basis in second quarter following an increase of Dh15 million in first quarter of 2020.
However, total operating expenses increased in the first half due to one-off expenses related to additional pension cost, Covid-19-related expense and costs associated with network expansion.
- waheedabbas@khaleejtimes.com


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