ADNOC Distribution achieved strong business results during the past year (2022), supported by the high demand for fuel and its new projects.
Today, Thursday, February 9, the Emirati company announced that it recorded strong profits during 2022; Its earnings before interest, tax, depreciation and amortization increased by 15% on an annual basis, recording 3.52 billion dirhams ($ 0.96 billion).
And the results of ADNOC Distribution’s business in 2022 revealed that net profit increased by 22% on an annual basis, to reach 2.75 billion dirhams ($ 0.75 billion) during 2022.
* The dollar is equivalent to 3.67 UAE dirhams
fuel sales
ADNOC Distribution’s results were supported by an increase in the total quantities of fuel sold during 2022, which recorded a growth of 8% year-on-year, with an increase of 19% in the quantities of commercial fuel.
The growth is mainly due to the continued economic expansion across the Emirates, the continued expansion of the company’s station network locally, and the increase in shopping traffic at service stations.
Badr Saeed Al-Lamki, CEO of ADNOC Distribution, said: “The company achieved strong financial and operational performance during 2022, as it maintained a positive growth path with large cash flows that reinforced its strong financial position.
He added, “Accelerating sustainable growth and achieving attractive returns for shareholders through efficient capital allocation will remain a top priority for ADNOC Distribution.”
Plans for 2023
Following the record results achieved by ADNOC Distribution during 2022; The company’s growth momentum is expected to continue through 2023, the year in which it aims to achieve an EBITDA of at least $1 billion.
This comes on the back of the continuous expansion of its station network and the high contribution of the non-fuel retail sector.
As it seeks to strengthen its business in the future, ADNOC Distribution continues to explore opportunities for increased growth and new sources of revenue through the transformation of the energy sector, including new mobility solutions such as electric vehicle charging.
cash flow
During 2022, ADNOC Distribution succeeded in renewing its agreement with ADNOC to supply refined products for another 5 years; This reinforces the strength of its financial position supported by predictable profit margins and the ability of its core business to generate strong cash flows.
And ADNOC Distribution strengthened its growth path during 2022 through its commitment to providing the latest digitally enhanced fueling and shopping services to its customers and the local communities it serves throughout the Emirates.
In addition, the year 2022 witnessed the opening of 68 new service stations in the UAE and Saudi Arabia, of which 21 stations opened during the last quarter of the year, including a distinguished station established according to the latest international standards located on Sheikh Zayed Road in the center of Dubai.
The total number of the company’s stations internationally reached 568 service stations; Of which, 502 service stations are in the UAE and 66 are service stations in Saudi Arabia, as of December 31, 2022.
retail sales
Retail sales continued to gain momentum in 2022; The number of non-fuel transactions increased by 15% year-on-year during 2022.
This was contributed by the company’s commitment to the strategy of the non-fuel retail sector, with a focus on enhancing the customer’s shopping experience and the modernization of ADNOC Oasis stores through the renovation of 42 stores.
Promotional initiatives related to the ADNOC Rewards program also contributed to the growth. It now covers all shopping activities at service stations. Including services for refueling, oil changes, purchases in stores and car washes.
ADNOC Distribution maintained its leading position as the largest operator of retail stores nationwide by expanding its network of stores, which increased from 346 stores at the end of 2021 to 362 stores at the end of 2022.
Total stations in Egypt
Last year witnessed ADNOC Distribution continuing to expand its presence internationally through its partnership with Total Energy, announcing a historic deal to acquire a 50% stake in Total Energy Marketing Egypt, one of the 4 largest fuel retail companies in Egypt.
The acquisition deal is in line with the company’s vision of becoming ADNOC Distribution, the regional leader in the fuel distribution sector.
The acquisition is expected to close during the first quarter of 2023, subject to fulfillment of certain conditions, including obtaining regulatory approvals.
Al-Lamki added: “The past year witnessed the achievement of many notable achievements in the history of ADNOC Distribution, including our signing of the largest international acquisition deal in Egypt. We also opened a distinguished service station in Dubai, the company’s first, on Sheikh Zayed Road.”
Electric vehicle charging stations
ADNOC Distribution’s quest to achieve profitable returns for shareholders in the long term is based on its commitment to enhancing the competitiveness of its business in the future. Including through initiatives such as the recently announced partnership with TAQA, one of the largest integrated utility companies listed in the EMEA region, to establish E2GO, this mobility joint venture aims to create Operating the necessary infrastructure for charging electric vehicles in Abu Dhabi and across the country.
The company intends to continue the momentum in terms of sustainability efforts during 2023 and beyond to ensure the future of its operations, including the installation of solar panels to operate service stations, and the use of biofuels to power its fleet of vehicles.
The company has also pledged to reduce emissions from its operations and reduce its carbon intensity by 25% by 2030.
and announced the conversion of an existing loan of $1.5 billion (5.5 billion dirhams) into a sustainability-related loan; This confirms the company’s commitment to achieving sustainability in its daily operations.
Dividend
Within the framework of the established dividend policy, the Board of Directors of ADNOC Distribution has recommended a cash dividend of 1.285 billion dirhams (10.285 fils per share) for the second half of 2022.
This comes within the framework of ADNOC Distribution’s commitment to achieving profitable growth and rewarding returns for shareholders. The recommendation will be presented to shareholders for approval during the Annual General Assembly meeting to be held in 2023.
The total dividend for the fiscal year 2022 is expected to be AED 2.57 billion (20.57 fils per share), which means an annual earnings per share of 4.6% for 2022 (based on the share price of AED 4.44 as on February 8, 2023).
The company distributed half of the 2022 dividend in October last year, and the second part of the dividend is expected to be paid in April 2023, subject to shareholder approval.
The company’s dividend policy for the following years stipulates the distribution of dividends of at least 75% of the distributable profits.
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