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UAE: Adnoc Distribution net profit surges to $150 million

The company also reported a strong non-fuel gross profit increase of 16 per cent year-on-year to $55 million

Published: Thu 9 May 2024, 3:59 PM

By
Issac John

Adnoc Distribution, the UAE’s largest fuel and convenience retailer, said on Thursday that its first quarter net profit saw a robust 13 per cent year-on-year increase to $165 million.

The fuel retailer reported an 18 per cent year-on-year increase in its earnings before interest, taxes, depreciation and amortisation (Ebitda) to $248 million, “demonstrating that the company remains firmly on track to achieving the goals outlined in its new five-year strategy.”

The growth follows sustained momentum in both fuel and non-fuel retail segments in Q1, including developments in Adnoc Distribution’s pipeline of more than 20 Artificial Intelligence (AI)-driven initiatives, such as Fill and Go and the Fuel Demand AI Model, aimed at accelerating growth and enhancing operational efficiencies, the company said in a statement.

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The company also reported a strong non-fuel gross profit increase of 16 per cent year-on-year to $55 million. It maintained a strong balance sheet with a net debt-to-Ebitda ratio of 0.50 times, reinforcing its strong financial position and enabling the Company to invest in growth and deliver attractive shareholder returns.

Bader Saeed Al Lamki, CEO of Adnoc Distribution, said the robust first-quarter results growth is a testament to the company’s five-year strategy announced earlier this year, which prioritizes domestic growth, international platforms, and future-proofing the business.

“We are well positioned to achieve our operational objectives for 2028, aiming to expand the Adnoc Distribution network to 1,000 stations, increase the number of fast and super-fast EV charging points to at least 500, grow our non-fuel transactions by 50 per cent, and increase the number of convenience stores by 25 per cent.”

“The integration of AI, a cornerstone of our strategy, continues to yield tangible results across our operations. For instance, thanks to our innovative Fuel Demand AI Model, we harness predictive demand analytics to optimize fuel delivery across our network. The model is projected to prevent potential lost sales totalling over $27 million in a five-year period,” the statement said.

In Q1 2024, Adnoc Distribution opened 8 new service stations, expanding its total network to 846 stations. The company remains on track to achieve its full-year target of adding between 15 and 20 new sites. The company also saw ongoing growth in its non-fuel retail business, with transactions increasing by 7.0 per cent across the network in the UAE.

The company said it is allocating capital towards convenience and mobility to transform its stations into destinations of choice in line with its new growth strategy.

“In Q1, it expanded its non-fuel offerings by opening two new high-capacity car wash tunnels, which have significantly greater capacity than conventional facilities. Plans are underway to launch eight more car wash tunnels and upgrade 50 per cent of automatic car washes by the end of 2024. The company aims to double the number of property units occupied by leading international and regional food and beverage brands across its network by the end of 2025,” said the statement.

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