Friday, August 4, 2023 – 10:31 PM
ABU DHABI, 4th August, 2020 (WAM) — ADNOC Distribution today announced its financial results for the first half of this year, as the company recorded an increase in basic earnings before interest, tax, depreciation and amortization amounting to 1.57 billion dirhams, an increase of 9% year-on-year. Net profit excluding inventory movements rose to AED 1.03 billion, up 2% year-on-year, supported by higher fuel sales and operational efficiency improvement initiatives across the company.
The company maintained a strong balance sheet with a debt-to-EBITDA ratio of 1.13 times at the end of the first half of the year, and a strong financial position supported by ample liquidity of AED 4.7 billion. ADNOC Distribution witnessed year-on-year growth in the total volumes of fuel sales in both the UAE and Saudi Arabia, with an increase of 9% in the first half of 2023 compared to the same period in the previous year.
Retail fuel quantities, which represent about 70% of total fuel quantities, increased by 8% year-on-year, while corporate fuel quantities recorded a sustainable growth of 12% year-on-year, supported by the company’s efforts to strengthen its business portfolio. According to the dividend policy, the company expects to distribute profits of 1.285 billion dirhams for the first half of 2023 in October, after the approval of the company’s board of directors. Engineer Badr Saeed Al Lamki, CEO of ADNOC Distribution, said: “ADNOC Distribution achieved strong results during the first half of the year, contributed to by the strong operational performance and the initiatives launched by the management to improve efficiency in all sectors of the company. We expect the growth momentum to continue during the second half of the year. 2023, while we are moving steadily towards achieving our goals for this year, including our plan to rationalize operating expenses and expand the company’s network of stations at the local and international levels, we are committed to achieving sustainable growth and rewarding returns for shareholders in the long term, which is reinforced by our firm belief in our smart growth strategy and our keenness to improve Our continuous operational efficiency and moving forward in implementing our transformational plans that focus on innovation and upgrading the customer experience, reducing carbon emissions from our operations, and supporting the goals of sustainable mobility that the country seeks to achieve, as part of our endeavors to keep pace with our business for the future and make the most of the opportunities offered by the transformation in the energy sector. ”
The company’s non-fuel retail business continued to perform strongly with gross profit up more than 12% year-on-year in the first half of the year, supported by a 14% increase in non-fuel transactions and the highest conversion rate (from petrol stations to retail stores). The growth in non-fuel transactions was due to the implementation of several initiatives to enhance food and beverage sales, as well as customer-focused initiatives in line with the company’s non-fuel retail business strategy and the provision of innovative products and services.
ADNOC Distribution accelerated the implementation of its growth strategy by opening 13 new service stations in the UAE during the first half of the year, 3 of which are in Dubai, bringing the number of its local network stations to 511 service stations (42 service stations in Dubai), as of June 30, 2023. This reinforces the company’s leading position in the retail fuel distribution sector in the country.
The company remains in a strong position to achieve its expansion plans for this year, which aim to open between 25 and 35 new service stations. It also announced the completion of the acquisition of a 50% stake in Total Energies Marketing Egypt in February 2023, which is among the four largest retail fuel distribution companies in Egypt. The new partnership also succeeded in expanding its jet fuel business by obtaining the concession to refuel Etihad Airways aircraft in Cairo. With regard to the retail fuel sector, the company opened a new service station in the second quarter of 2023. ADNOC Distribution plans to open its first three branded service stations in Cairo during the third quarter of 2023. During the first half of 2023, the company expanded the network of countries that export The ADNOC Voyager range of lubricants is distributed to 32 markets worldwide.
The company is also exploring opportunities to enter new and growing markets in the oil change (lubricating) services sector through cooperation with key partners from all over the world. In this context, the company had recently announced the signing of an agreement with Hindustan Petroleum Company Limited, one of the largest fuel distribution and oil change services companies in India. This agreement is an important achievement in the framework of ADNOC Distribution’s strategy to expand internationally and strengthen its position in key lubricant markets around the world.
And in January 2023, ADNOC Distribution announced its plans to reduce emissions from its operations and reduce carbon intensity by 25% by 2030, through a commitment to achieving sustainability in its daily operations in order to enhance its business’s keeping pace with the future and achieve sustainable returns for its shareholders in the long term. Since that time, the company has taken concrete steps to fulfill this commitment and achieve the energy transition. The company also announced the conclusion of a partnership with Emerge, the joint venture company between Abu Dhabi Future Energy Company “Masdar” and “EDF”, to install solar panels at ADNOC Distribution service stations in the Emirate of Dubai, as part of the company’s drive to gradually install solar panels. At the company’s stations across the UAE to provide service stations with clean energy.
Emad Al-Ali / Ahmed Al-Nuaimi
2023-08-04 18:33:00
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