ADNOC Distribution today reported strong first-quarter 2022 results, recording a 7.8% year-on-year increase in EBITDA to AED881 million with a 6.3% year-on-year increase in net profit to AED671 million for the quarter, while cash flow generation remained strong with free cash flow of AED1.9 billion.
The company has seen a strong recovery in total fuel volumes compared to the first quarter of 2021, with an increase of 11% year-on-year. In addition, corporate fuel volumes witnessed strong growth with a 19% year-on-year increase, partially driven by the signing of new sales agreements confirmed in the final quarter of 2021. Non-fuel retail gross profit grew 11% compared with the same period in 2021, with a 20% increase in non-fuel transactions across the UAE.
ADNOC Distribution continued to increase its footprint throughout the first quarter of the year, delivering local and international network expansion and bringing its network total to more than 500 across all geographies. In Saudi Arabia, the company added 15 new stations, increasing its network to a total of 55 stations.
In the UAE, the company opened three new stations, taking its total domestic network to 464. ADNOC Distribution remains on track to deliver 20-30 new sites in the UAE before the end of 2022.
In addition to the continued expansion of its service network, ADNOC Voyager lubricants maintained strong momentum in its international expansion through the first quarter, bringing its export network to a total of 20 countries. The company also expanded its product offering with the launch of the ADNOC Voyager Green Series, which offers customers a 100% plant-based lubricant range for petrol and diesel engines.
CEO of ADNOC Distribution Bader Saeed Al Lamki said, “ADNOC Distribution has had a positive start to 2022. We must stay relevant and deliver on our customers’ desire for continued convenience while ensuring we remain focused on the future, creating solutions that are evolving in response to changing market dynamics.
“Our network expansion has maintained strong momentum throughout the year’s first quarter. This can be seen particularly in Saudi Arabia, where we have grown our service station network by 40%. We are well on track to deliver 60-80 stations across the UAE and international markets by the end of this year. We have already marked a number of milestones in the first quarter, with the opening of 18 new service stations across the UAE and KSA and the launching of new products and enhancing of services, with progress set to continue and accelerate throughout the year.”
The increased footfall across the network has also been supported by consistent marketing and customer loyalty campaigns, with promotions, delivered in-store and through the ADNOC Rewards programme. In the first quarter, a series of promotions were launched in ADNOC Oasis stores, car wash, and lube change.
The ADNOC Rewards loyalty programme also continued to add members in the first quarter of 2022, with more than 1.3 million members now enrolled and 83 partners providing discounts and deals through the ADNOC Distribution app. The programme has been expanded to include a fuel redemption option, whereby customers can pay for their fuel with their ADNOC Rewards points.
During its Annual General Assembly Meeting on 24th March, ADNOC Distribution shareholders approved a dividend for the second half 2021 of $350m (10.285 fils per share), which was paid in April 2022, bringing the total dividend of 2021 to $700m (20.57 fils per share).
The company’s robust and continued growth has enabled a progressive dividend policy for investors. Its dividend policy sets a dividend of a minimum of AED2.57 billion for 2022, providing visible payback to shareholders until April 2023.
The dividend policy for the years thereafter sets a dividend equal to at least 75% of distributable profits.
The company also continues to enhance its attractive investor position, with its inclusion in the new blue chip index launched as a partnership between FTSE Russell and Abu Dhabi Securities Exchange (ADX).
The FTSE ADX 15 (FADX15) Index represents the top 15 companies on the Main Board of the ADX, selected by a combination of free float adjusted market capitalisation and daily trading value. The index will undergo a bi-annual review process in March and September. This is the latest inclusion for ADNOC Distribution, which, in 2021, was also included in the MSCI Emerging Markets (EM) Index, the most widely tracked index by global institutional investors, as well as in the FTSE EM Index.
“ADNOC Distribution maintains a strong balance sheet alongside robust liquidity, which ensures that we can continue to pursue growth opportunities and sustain attractive shareholder payback,” added Al Lamki.
“We have committed to ambitious national and international growth, which we remain on track to deliver in 2022.”