Shareholders of ADNOC Distribution approve $700m dividend

Shareholders of ADNOC Distribution, the fuel distribution business of Abu Dhabi National Oil Company, have approved a total dividend of $700m (Dhs2.57bn) for 2022, which translates to 20.57 fils per share.

The dividend will be paid in April 2023. ADNOC Distribution’s full-year net profit surged by 22 per cent year-on-year to Dhs2.74bn last year while its revenues rose by 54 per cent to Dhs32bn, driven by higher fuel selling prices amid a rise in global crude prices.

Read: Abu Dhabi’s ADNOC Distribution reports 22% rise in net profit for 2022

The company said it expects to pay a “minimum” dividend of 20.57 fils per share for 2023 considering the company’s record performance. “The company’s dividend policy for the years thereafter sets a dividend equal to at least 75 per cent of distributable profits,” ADNOC Distribution said in a bourse filing in February.

ADNOC Distribution reported earnings before interest, tax, depreciation and amortisation (EBITDA) of Dhs3.52bn. It also maintained a strong balance sheet, with liquidity of Dhs5.5bn comprising Dhs2.7bn in cash and cash equivalent and  Dhs2.8bn in unutilised credit facilities and net debt to EBITDA of 0.78x.

The company’s convenience store sales continued to gain momentum throughout 2022, with non-fuel retail transactions increasing by 15 per cent during 2022.

ADNOC Distribution growing portfolio

ADNOC Distribution’s expansion into Egypt marks another important milestone in the company’s broader strategy to expand its business into attractive international growth markets. It completed the acquisition of a 50 per cent stake in TotalEnergies Marketing Egypt for approximately $186m in February.

The partnership between ADNOC Distribution and TotalEnergies Egypt includes a diversified downstream portfolio of 240 fuel retail stations, over 100 convenience stores, 250+ lube changing stations and car washes as well as wholesale fuel, aviation fuel and lubricant operations.

The deal, which marks the fuel and retail distributor’s official entry into the Egyptian market, is expected to uplift the company’s EBITDA from the first-year post-closing (c.+6% on a fully consolidated basis).

The company has significantly expanded its global portfolio to 502 retail fuel stations and 362 convenience stores in the UAE as of December 32, 2022. In Saudi Arabia, ADNOC Distribution expanded its network to 66 outlets.

Read: ADNOC Distribution completes acquisition of 50% stake in TotalEnergies Marketing Egypt

“I am confident that our ongoing emphasis on diverse national and international expansion, coupled with an unyielding dedication to providing top-notch, inventive and environmentally sound mobility products and solutions, will enable us to achieve and surpass our growth targets for numerous years to come,” said Bader Saeed Al Lamki, CEO of ADNOC Distribution.

Sustainability

ADNOC Distribution plans to slash its net-zero carbon emissions by 25 per cent in 2030 and the company said it install solar panels to power service stations, use biofuels in its fleet of vehicles and expand its network of EV charging stations.

Reflecting on a successful 2022, we accelerated delivery on our Smart Growth Strategy, achieving new milestones across our domestic and international network, while future-proofing our operations to drive sustainable long-term shareholder returns. #ADNOCDistribution pic.twitter.com/knDK91Ws7o

— ADNOC Distribution (@ADNOCdist) March 16, 2023

Earlier in January,  the company partnered with Abu Dhabi National Energy Company (TAQA) to create a joint venture that will build and operate electric vehicle (EV) infrastructure in Abu Dhabi. The venture, E2GO, aims to become the principal provider of EV charging points and associated infrastructure across Abu Dhabi.

“As much as 2022 was about growth, our journey in 2023 will focus on growth and sustainability,” added Al Lamki.

The energy provider is spearheading the roll-out of EV chargers in Q1 2023, having increased the charging points to 36 across the UAE. The assets will eventually be absorbed into E2GO.

The firm became the first UAE fuel retailer to tap into sustainable financing, by converting an existing Dhs5.5bn term loan into a sustainability-linked one in partnership with First Abu Dhabi Bank as environmental, social and governance co-ordinator.