Adnoc Distribution shareholder proposes Dh2.57bn dividend this year and next

Owner of more than 10 per cent of the fuel retailer is also suggesting a minimum pay out ratio of 75% of distributable profits from 2022 onwards

Adnoc Distribution's UAE network reached 389 retail fuel stations as of 31 March 2020, including ten fuel stations in Dubai. The company also operates in Saudi Arabia. Courtesy Adnoc Distribution

Adnoc Distribution, the UAE’s largest fuel and convenience retailer, is set to pay Dh2.57 billion in dividends this year and next, and is considering paying out at least three quarters of its future profits as dividends from 2022.

The company proposed an annual dividend of Dh2.57bn, or Dh0.2057 per share, for 2020.

In a regulatory filing to the Abu Dhabi Securities Exchange, where its shares trade, it also said a shareholder with a stake of more than 10 per cent is proposing that next year's minimum dividend matches this year's figure.

“Thereafter, an annual dividend in respect of each fiscal year in an aggregate amount equal to at least 75 per cent of distributable income for such year” is also being proposed by the shareholder, the company said on Thursday.

The proposed dividend distribution policy is pending approval at the company’s virtual general assembly meeting, which is scheduled for March 31.

The company also said the requesting shareholder confirmed its continued support of the dividend policy position for 2020, and "expressed its rationale for the request to amend the dividend policy for 2021 onwards as being its trust in the company’s strong financial position, the strength of its balance sheet to withstand current market conditions underpinned by low exposure to oil price volatility, and confidence in the company’s ability to deliver on its growth targets”, the statement said.

Adnoc Distribution reported an 11.3 per cent increase in fourth quarter profit for 2019 on the back of a rise in operating income as the company presses ahead with expanding its network in 2020.

Net profit for the quarter ending December 31 climbed to Dh496 million and operating income rose an annual 9.6 per cent to Dh509m.

For the full year, net profit increased 4.2 per cent year-on-year to Dh2.22bn, the company said last month.

The company has 382 retail fuel stations in the UAE as of December 31. Six new fuel stations were added in the country last year, including three in Dubai.

It is planning to open at least 60 fuel stations this year, including "Adnoc On The Go" drive-thru stations aimed at smaller communities. In Dubai, 20 to 25 new stations, most of which will be regular stations, are set to open in 2020.