ADNOC Distribution maintained a strong balance sheet during the first quarter of the year, with free cash flow of 1.04 billion dirhams ($280 million).
ADNOC Distribution recorded an 8% year-on-year increase in total fuel quantities sold in the United Arab Emirates and Saudi Arabia during the first quarter of 2023, thanks to the continued economic recovery and the expansion of the company’s network of stations across the country, according to the company’s statement.
The statement showed that total quantities of fuel sold at retail – which account for around 65% of total quantities of fuel sold – increased by 5.5% year-on-year.
In addition, business fuel sales volumes saw strong growth of 21% year-on-year compared to the same period in 2022, primarily due to the company’s efforts to improve its business portfolio through programs. business development and customer relationship management.
Engineer Badr Saeed Al Lamki, CEO of ADNOC Distribution, said: “Our efforts during the first quarter of 2023 focused on improving our operations across our network, both locally and internationally, while ensuring that our cross-border teams are well equipped to support our pace of growth. in 2023 and beyond. We have also maintained At the same time, we are able to generate strong cash flow and have strengthened our financial position to create additional shareholder value through efficient capital allocation.
Al-Lamki added, “We are working to enhance our business growth locally and internationally by exploring merger and cumulative value acquisition opportunities, considering profitability and finding new sources of revenue. revenue among the company’s main decision-making factors. manufacturing process.
Non-fuel retail growth continued in the first quarter of 2023, with the number of transactions recorded increasing by 11% year-on-year and total non-fuel retail profit increasing by 9% year-on-year . over-year.
ADNOC Distribution continued to expand its local presence by opening six new service stations during the first quarter of the year, reinforcing its position as a national leader in the fuel distribution sector, as it operates 507 service stations. service across the country, as of March 31, 2023 ADNOC Distribution is committed to its plans to open 25 to 35 new stations during this year.
The company has also strengthened its international presence by concluding in February 2023 the agreement to acquire a 50% stake in the activities of Total Energy Marketing Egypt, which is one of the four largest fuel distribution companies in Egypt.
The partnership includes a diverse business portfolio that includes 240 retail gas stations, over 100 retail stores, over 250 oil change stations, car wash centers, wholesale fuel operations , jet fuel and lubricants.
Total Energies Marketing Egypt has successfully developed its kerosene business by acquiring Etihad Airways’ aircraft refueling concession in Cairo. ADNOC Distribution plans to open its first branded service station in Cairo during the second quarter of 2023.
During the first quarter of 2023, ADNOC Distribution invested a total of AED158 million in organic capital expenditure, while maintaining a strong balance sheet with a net debt to EBITDA ratio of 1.06x.
The company is expected to continue its pace of growth during 2023, as it aims to strengthen its expansion plans by investing between 918 and 1,100 million dirhams.
ADNOC Distribution plans to continue the growth momentum in fuel quantities in 2023 while continuing its efforts to expand its network of stations, and is also working to strengthen the contribution of non-fuel retail.
The company achieved additional operational cost savings amounting to MAD 33 million during the first quarter, and is progressing steadily in line with its trend of achieving additional operational expenditure savings on a similar basis, with a total value exceeding 92 million dirhams in 2023, by launching administrative initiatives aimed at improving the efficiency of operations for all areas of the company and rationalizing expenses.
As part of its drive to improve its business continuity for the future, ADNOC Distribution continues to explore potential growth opportunities and new revenue streams, which are offered by the transformation of the energy, including new mobility solutions such as electricity vehicle charging with a focus on sustainability initiatives.
The company strengthened its position by launching the “ADNOC Full & Go” service, becoming the first fuel distributor in the region to introduce this innovative technology at service stations.
This AI-powered service uses the latest innovations in computer vision technology, including machine learning models that allow computers to recognize vehicles and respond in a way that personalizes the refueling experience , strengthening ADNOC Distribution’s leading position in the country in the fuel distribution sector. retail stores.
This also includes the recently announced partnership with TAQA, one of the largest integrated utilities listed on the financial market in Europe, the Middle East and North Africa, to establish “E2GO”, as this joint venture aims to establish and operate the mobility needed to charge electricity for vehicles in Abu Dhabi and various parts of the country. The company currently operates 36 electric vehicle charging stations with power ranging from 50 to 180 kilowatts.
In January, ADNOC Distribution announced plans to reduce its carbon emissions intensity by 25% by 2030, focusing on the sustainability of its day-to-day operations, to improve its business and future competitiveness and achieve long-term sustainable value for its shareholders.
Since then, the company has taken several concrete steps to deliver on its commitment and keep pace with the paradigm shift in the energy sector, including completing the conversion of an existing loan of 5.5 billion dirhams (1 $.5 billion) into a loan linked to sustainability goals during the first quarter of the year, confirming the company’s commitment to achieving sustainability in its day-to-day operations.
The company recently announced a partnership with Emerg, a joint venture between Abu Dhabi Future Energy Company, Masdar, and EDF Group, to install solar panels at ADNOC Distribution service stations in the Emirate of Dubai. , as part of the company’s project. lead to the gradual installation of solar panels at the company’s stations across the UAE to provide electrical power needed for day-to-day operations. ADNOC Distribution remains committed to achieving profitable growth and shareholder returns.
The good results achieved by the company in 2022, in addition to the continued growth, allowed the development of a new dividend policy at the General Meeting held in March 2023, providing for a dividend distribution of no less than 2 .57 billion dirhams (20.57 fils per share) for the year 2023. (against a minimum of 75% of distributable profits under the previous policy).
This provides an annual earnings per share of 4.8% (based on the share price of AED 4.30 as of May 12, 2023).
The company’s dividend policy for subsequent years is to distribute at least 75% of distributable profits.
The company said in its statement that the dividend policy reflects the company’s strong financial position and its confidence in its growth prospects and ability to generate stable cash flow. ADNOC Distribution remains confident in its ability to deliver on its strategic commitments and generate sustainable cash income for its shareholders.
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