UAE’s ADNOC Distribution changes share dividend policy

ADNOC Distribution approved a new share dividend policy during its recent Annual General Assembly.

The UAE’s largest fuel and convenience retailer confirmed Dhs2.57bn dividend for 2021 (20.57 fils per share) and a minimum of Dhs2.57bn dividend for 2022 (compared to minimum 75 per cent of distributable profits as per the previous policy).

The dividend policy for the years thereafter will remain unchanged at a dividend equal to at least 75 per cent of distributable profits, reported state news agency WAM.

Shareholders also approved a second and final dividend payment of Dhs1.285bn (10.285 fils per share) for 2020, resulting in a full-year dividend of Dhs2.57bn (20.57 fils per share) and representing an increase of 7.5 per cent compared to 2019.

” ADNOC Distribution shares offer a unique value proposition to shareholders and investors with a combination of low exposure to oil price volatility, predictable and healthy cash flows, strong growth potential and an attractive dividend policy that offers high payback visibility,” said Sultan Ahmed Al Jaber, chairman of ADNOC Distribution.

In September last year, ADNOC Distribution completed an institutional placement of 1.25bn shares worth $1bn on the Abu Dhabi Securities Exchange (ADX) fpr institutional investors. It was the largest block placement of a publicly listed GCC company. Doubling of free float to 20 per cent also marked the broadening of the company’s shareholder base, allowing for greater liquidity of its shares on ADX.

In February, ADNOC Distribution reported a net profit of Dhs2.4bn for 2020, of which Dhs851m was posted in the fourth quarter. The company’s EBITDA (earnings before interest, taxes, depreciation and amortisation), however, totaled Dhs3.6bn.

“ADNOC Distribution is well placed to continue building on recent success, in the UAE and beyond, in the year ahead and remains on track to reach EBITDA target of at least USD 1.0 billion by 2023,” said Ahmed Al Shamsi, acting CEO of ADNOC Distribution.

Read: UAE’s ADNOC Distribution records Dhs2.4bn in net profit for 2020

As of December 31, 2020, its liquidity was recorded at Dhs5.6bn in the form of Dhs2.8bn in cash and cash equivalents and Dhs2.8bn in unutilised credit facilities.

Following a 24 per cent quarter-on-quarter increase in total fuel volumes in Q3 2020, volumes for the fourth quarter of 2020 increased 2 per cent compared to the third quarter of 2020.

At the annual general meeting, and in compliance with with market regulations, the current board of directors has completed its term of service. The shareholders approved the appointment of a new board of directors.

Last month, Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and Ruler of Abu Dhabi, issued a resolution to form a board of directors for ADNOC.

The board will be chaired by Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces and chairman of the Abu Dhabi Executive Council.

Read: UAE’s ADNOC appoints new managing director, restructures to form executive board of directors

Also, Dr Sultan Ahmed Al Jaber was appointed as managing director of ADNOC, in addition to his position as CEO of the company.

Furthermore, an executive committee of the board of directors for the company will be chaired by Sheikh Khaled bin Mohamed bin Zayed Al Nahyan.