Friday, June 21, 2024

Emirates News Agency – “ADNOC Distribution” profit of 551 million dirhams in the first quarter of 2023


ABU DHABI, 12 May / WAM / ADNOC Distribution today announced financial results for the first quarter of 2023, showing a strong performance and an increase in net profit, excluding inventory changes, of 5.5% and 19.4% on an annualized basis. 551 million on a quarterly basis. Dirham is driven by strong performance and measures to improve operational efficiency across all departments of the company.

ADNOC Distribution maintained a strong balance sheet in the first quarter of the year with free cash flow of AED 1.04 billion. ADNOC Distribution saw an 8% year-on-year increase in total fuel volumes sold in both the UAE and Saudi Arabia in the first quarter of 2023, driven by continued economic recovery and the expansion of the company’s network across the country. . Total volumes of retail fuel sales – which account for around 65% of total volumes of fuel sold – increased by 5.5% year-on-year. In addition, corporate fuel sales volumes saw strong growth of 21% year-on-year compared to the same period in 2022, mainly driven by the company’s efforts to improve its business portfolio through business development programs and customer relationship management.

Engineer Badr Saeed Al Lamki, CEO of ADNOC Distribution, said: “Our efforts in the first quarter of 2023 are focused on improving our operations across our network both domestically and internationally, while our cross-border teams are well positioned to sustain our growth momentum. We maintain through 2023 and beyond, at the same time, we can generate strong cash flows and strengthen our financial position to create additional value for shareholders through efficient capital allocation. Al-Lamki added: “We are working to improve the growth of our business both domestically and internationally by exploring merger and acquisition opportunities of overall value, taking into account profitability and identifying new sources of revenue as key factors in the company’s decision-making process.”

Growth in non-fuel retail continued in the first quarter of 2023. -year, driven by a series of customer-centric roadshows and initiatives as part of the company’s strategy to strengthen its non-fuel retail business. These include enhancing the customer shopping experience by using artificial intelligence and data analytics techniques to provide relevant offers to customers through the ADNOC Rewards program, as well as modernizing retail spaces across the entire network of service stations through the ADNOC Oasis Store Renovation Program. Efforts to link the ADNOC Rewards program to all purchases made at service stations and provide customers with an opportunity to earn points and exchange them for a number of valuable offers including refueling, oil change services, car washes and retail outlets also contributed to the growth. . As on March 31, 2023, the company maintained its leading position in the UAE in the retail store operations sector, operating 345 retail stores.

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Operating 507 service stations across the country as on March 31, 2023, ADNOC Distribution continued to expand its presence domestically by opening six new service stations in the first quarter of the year. ADNOC Distribution remains committed to its plans to open 25-35 new stations this year. The company strengthened its international presence with the February 2023 acquisition of a 50% stake in the business of Total Energy Marketing Egypt WLL, one of the four largest fuel retail companies in Egypt. The partnership includes a diversified business portfolio that includes 240 retail fuel stations, over 100 retail stores, over 250 oil change stations, car wash centers, bulk fuel, jet fuel and lubricants operations. Total Energy Marketing Egypt has successfully expanded its jet fuel business by winning an Etihad Airways refueling concession in Cairo. ADNOC Distribution plans to open its first branded service station in Cairo in the second quarter of 2023.

In the first quarter of 2023, ADNOC Distribution invested a total of AED 158 million in organic capital expenditures, while maintaining a strong balance sheet with a net debt-to-EBITDA ratio of 1.06 times. The company is expected to continue its growth momentum in 2023, aiming to boost its expansion plans by investing between 918 and 1,100 million dirhams.

ADNOC Distribution expects to continue the pace of growth in fuel volumes in 2023, while continuing efforts to expand its network of stations and working to improve the contribution of non-fuel retail business.

The company achieved additional savings in operating costs of 33 million dirhams in the first quarter, and is steadily progressing in line with its trend of achieving additional savings in operating costs on a similar basis, with the total value exceeding 92 million dirhams by 2023. Rationalize activities and expenditures for all departments of the organization by initiating management initiatives aimed at improving efficiency.

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As part of its efforts to improve the continuity of its business for the future, ADNOC Distribution is exploring potential growth opportunities and new sources of revenue offered by the transformation of the energy sector, with a focus on sustainability initiatives including new mobility solutions such as electric vehicle charging. The company strengthened its leadership position by launching the “ADNOC Full & Co” service, becoming the first fuel distributor in the region to introduce this innovative technology at service stations. This AI-powered service leverages the latest innovations in computer vision technology, including machine learning models to identify vehicles and respond to personalize the fueling experience, strengthening ADNOC Distribution’s country-leading position in the fuel delivery sector. Retail stores. This includes the recently announced partnership with TAQA, one of the largest listed integrated utility companies in Europe, Middle East and North Africa, to establish “E2GO”, a joint venture aimed at establishing and operating the required mobility. To charge vehicles in Abu Dhabi and various parts of the country. The company currently operates 36 electric vehicle charging points with power ranging from 50 to 180 kW.

In January, ADNOC Distribution announced plans to reduce the intensity of its carbon emissions by 25% by 2030 by focusing on the sustainability of its daily operations, improving its business and future competitiveness, and achieving long-term sustainable value for its stakeholders. Since then, the company has taken a number of concrete steps to fulfill its commitment and keep pace with the paradigm shift in the energy sector, including converting an existing 5.5 billion dirhams ($1.5 billion) loan into one linked to sustainability goals. The first quarter of the year confirms the company’s commitment to achieving sustainability in its day-to-day operations.

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The company recently announced the installation of solar panels at ADNOC distribution service stations in the Emirate of Dubai in a joint venture with Emerg, a joint venture between Abu Dhabi Future Energy Company, Mastar and EDF Group. A drive to gradually install solar panels at the company’s stations across the UAE to provide the electrical energy needed to run daily operations. ADNOC Distribution is committed to achieving profitable growth and delivering returns to shareholders.

The strong results achieved by the company in 2022, in addition to continued growth, allowed the formulation of a new dividend policy during the general assembly meeting in March 2023, which provides for a dividend distribution of no less than 2.57 billion dirhams (20.57 fils). per share) for the year 2023 which gives an annualized return per share of 4.8% (based on share price of AED 4.30 as on May 12, 2023). The company’s dividend policy for subsequent years is to distribute not less than 75% of distributable profits. The dividend policy reflects the company’s strong financial position and its growth prospects and ability to generate stable cash flows. ADNOC Distribution remains confident in its ability to deliver on its strategic commitments and deliver consistent cash flow to its shareholders.

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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