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Adnoc Distribution posts Dh1.15b in H1 profit

Dubai - The company said the strong results were driven by higher fuel volumes, improvement in non-fuel and commercial gross profit margin and increased operational efficiencies made in the first half of 2021

The UAE’s largest fuel and convenience retailer Adnoc Distribution reported on Tuesday a first-half 2021 net profit of Dh1.15 billion.

The company said the strong results were driven by higher fuel volumes, improvement in non-fuel and commercial gross profit margin and increased operational efficiencies made in the first half of 2021.

In the first half, Ebitda stood at Dh1.53 billion and for the second quarter, it was Dh712 million with net profit of Dh521 million.

Engineer Bader Al Lamki, chief executive officer, Adnoc Distribution said the second quarter and half-year results further reinforced the company’s growth story and its strong standing within the fuel retail sector.

“We have a steadfast focus to provide modern fuel retail convenience to customers, deliver on the company’s ambitious strategy, and build long-term shareholder value through the next phase of our growth. These results reflect our focused drive towards delivering on our strategy, and sustained progress in all of our strategic pillars: fuel, non-fuel and cost-efficiency. We continue to make disciplined capital investments, achieving cost savings while growing our service station network, and maintaining high levels of safety, quality and customer experience,” Al Lamki said.

He said Adnoc Distribution is well-positioned to capitalise on a number of exciting opportunities and partnerships, both this year, and well into the future. “This progress is made with safety and sustainability at its heart, highlighting our commitment to a sustainable future and focus on the safety and wellbeing of our community.” The fuel retailer reiterated that its 2021 dividend policy is set to continue with a dividend of Dh 2.57 billion. The company expects to pay the first six-month dividend of 2021 (10.285 fils per share) in October of this year, subject to board approval. During its General Assembly meeting in March 2021, the company announced an amendment to its dividend policy for 2022, setting a minimum of Dh2.57 billion dividend for 2022 (compared to minimum 75 per cent of distributable profits as per previous policy), providing visible payback to shareholders until April 2023.

The company, which was recently was included in the MSCI EM Index after meeting the necessary requirements, said its fuel volumes saw progressive recovery towards pre-Covid levels, an indication of improving consumer sentiment following the successful vaccination drive across the UAE.

Adnoc Distribution is now among nine UAE listed companies to be part of the MSCI EM index which is most widely tracked by global institutional investors. The inclusion is expected to increase the attractiveness of the company’s shares to potential international investors and thus further diversifying the company’s investor base, the company said in a statement.

It said the company continues to add incremental volumes from its Dubai stations alongside a proactive sales strategy in its corporate business, a statement by Adnoc Distribution added. “Operationally, as part of its ongoing transformation, the company remains committed to reducing operating costs and ensuring competitiveness in the UAE fuel retail and convenience store sector. Throughout the first half of 2021, Adnoc Distribution’s operational expenditure (excluding depreciation) decreased by 10 per cent compared to H1 2020.”

Adnoc Distribution said it continues to maintain a robust balance sheet and remains well-positioned to expand both its domestic and international portfolio in-line with its smart growth strategy.

During the first half of 2021, the fuel retailer continued to deliver on its promise to bring modern, digitally-enabled fuel retail convenience to customers and communities domestically and internationally, with the opening of 12 new stations in the UAE. The company received no objection certificates from the Saudi General Authority for Competition (GAC) to acquire 35 stations in Saudi Arabia, which deals were previously announced in December 2020 and February 2021. Adnoc Distribution remains committed to bringing modern fuel and retail convenience to customers and communities across the kingdom.

-- issacjohn@khaleejtimes.com