ADNOC Distribution today reported that its Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) stood at AED2.3 billion, with a net profit of AED1.7 billion for the first nine months of 2021. For the third quarter, EBITDA was AED737 million with a net profit of AED529 million.
The company continues to see recovery with September total fuel volumes increasing by 10.6 percent compared to August, following the easing in travel restrictions, the successful vaccination drive across the UAE, government entities now 100 percent back to office, and schools return to face-to-face learning. It is expected that these volumes will continue to increase going into the fourth quarter.
ADNOC Distribution has continued to see incremental volumes from its Dubai stations, with a total of 31 stations now in operation in the emirate and a total network of 459 stations across the UAE as of 30th September 2021.
The company’s commercial business has continued to implement a proactive sales strategy, including continued international expansion of its ADNOC Voyager lubricants, with new distributors added in the third quarter of 2021 and export volumes at double 2020 levels year to date.
The company’s non-fuel business continues to show improvement with gross profit increasing by 4.3 percent in the third quarter of 2021 compared to the same period in 2020, underpinned by convenience stores refurbishment program alongside attractive promotions via the ADNOC Rewards programme.
Operationally, as part of its ongoing transformation, the company remains committed to reducing operating costs and ensuring competitiveness in the UAE fuel retail and convenience store sector. Throughout the first nine months of 2021, ADNOC Distribution’s operational expenditure (excluding depreciation) decreased by 17.8 percent compared to the first nine months in 2020, despite growth in the network.
During the first nine months of 2021, ADNOC Distribution has continued to deliver a modern, digitally-enabled fuel retail convenience to customers and communities across the UAE, with the opening of 14 new stations in the UAE. In addition, its ADNOC Oasis refurbishment programme has seen 35 stores renovated in the UAE, offering fresh food, barista-brewed coffee and a wider menu selection.
The company received no-objection certificates from the Saudi General Authority for Competition (GAC) to acquire 35 stations in Saudi Arabia. The company has continued to execute its plans in the Kingdom, with 10 new stations added as of 8th November 2021, and a total of 40-45 new stations to open in 2021.
Commenting on the financial results, Bader Saeed Al Lamki, CEO of ADNOC Distribution, said, “ADNOC Distribution presents a compelling investment story as today’s results show. The green shoots of recovery are here and accelerated growth is clear to see.
“We will continue to deliver on our expansion plans, domestically and internationally, which positions us as an even stronger fuel and convenience retail leader in the UAE and cements our place as a global fuel retailer.”
The company has ensured that 100 percent of its frontline employees working at service stations have received their vaccination booster dose.
Customer experience has been integral to the company throughout 2021, with the ADNOC Rewards loyalty programme recording more than 1.2 million members.
Following ADNOC Distribution’s inclusion in MSCI Emerging Markets Index in May 2021, ADNOC Distribution was also included in the FTSE Emerging Markets (EM) Index in September 2021. The inclusion in these reputable indices is expected to increase the attractiveness of ADNOC Distribution’s shares to potential international investors and thus further diversifying the company’s investor base.
In September, ADNOC Distribution announced that its Board of Directors had approved an interim dividend payment to shareholders for the first six months of 2021 of AED1.285 billion (10.285 fils per share), equivalent to $350 million, which was paid in October 2021.
This was the first payment in what is expected to be a full-year 2021 dividend payment of AED2.57 billion (AED20.57 fils per share), consistent with the company’s dividend policy. This would translate to a 4.8 percent annual dividend yield for 2021 (based on a share price of AED4.26 as of 8th November 2021).
As per the company’s approved policy, the second and final dividend for 2021 is expected to be paid in April 2022, subject to the Board of Directors’ recommendation and shareholders’ approval.
The dividend policy recognises the company’s strong financial position and confidence in its growth prospects and cash-flow generation ability going forward. ADNOC Distribution remains steadfast in the delivery of its strategic commitments and sustainable returns for its shareholders.
In the third quarter of 2021, ADNOC Distribution received a rating of A in the MSCI ESG (Environmental, Social and Governance) Ratings assessment, recognising ADNOC Distribution’s approach to managing its business for the long term sustainability.
