Adnoc Distribution posts Dh400 million profit in first quarter

Adnoc Distribution remains in a strong financial position and is well placed to navigate the challenges posed by the Covid-19 pandemic. - Supplied photo

Adnoc Distribution, the leading UAE fuel retailer, announced on Tuesday a net profit of Dh400 million and an increase of 3.6 per cent in revenues to Dh4.93 million in the first quarter.
The company said the profit plunge by 30.9 per cent was consequent to a drop in business from Covid-19 lockdown that led to lower total fuel sales.
"Despite the unprecedented market conditions and the uncertainties ahead, Adnoc Distribution remains in a strong financial position and is well placed to navigate the challenges posed by the Covid-19 pandemic," the company said in a statement.
Adnoc's overall financial position remained solid, with liquidity at Dh8 billion in the form of Dh5.2 billion in cash and Dh2.8 billion in unutilised credit facility.
"The company continues to focus on ensuring the safety of its employees, customers and local communities as it responds to Covid-19 and, despite the challenging operating environment, remains resilient with a strong balance sheet, delivering on its smart growth strategy with seven new stations opened in Q1 2020," said the statement.
Ahmed Al Shamsi, acting chief executive officer of Adnoc Distribution, said the company has shown strength and agility as a business in the first quarter. "We are especially thankful to our dedicated frontline colleagues who have played a vital role in this effort by providing a lifeline to communities around the country that rely on our services 24 hours a day to meet their essential fuel, food and grocery needs. In turn, we have taken and will continue to take, every step to ensure their health, safety and wellbeing."
"We also remain committed to our shareholders by protecting our business through the application of robust business continuity measures and the strengthening of our business resilience, in readiness to return in a position of strength and continue our growth trajectory when the effects of the pandemic subside."
Adnoc, which has 389 retail fuel stations across the UAE, also operates in Saudi Arabia. The company said it expect to increase its capital expenditures as more new stations are delivered over the second quarter and rest of the year. "This reiterates our strong commitment to secure future growth and deliver convenient fuel and retail offerings to our customers across the country," it said.
Adnoc Distribution's retail fuel business posted strong operational performance, with retail fuel gross profit growing by 13.1 per cent year on year in the first quarter, led by higher margins and volume growth in the first two months of the year. "Although retail fuel volumes declined by 1.9 per cent in the quarter, due mainly to the business impact of Covid-19 in March, commercial fuel volumes remained stable year-on-year."
During its recent general assembly meeting, the company announced that its 2020 dividend policy is set to continue with an increase of 7.5 per cent to Dh2.56 billion.
The company's shareholders approved amendments to the dividend policy for 2021 onwards, setting Dh2.56 billion million dividend for 2021 and a dividend equal to at least 75 per cent of distributable profits from 2022 onwards. - issacjohn@khaleejtimes.com