Adnoc Distribution, the UAE's largest fuel retailer, approved an interim dividend payment of more than Dh1.28 billion ($350 million) to its shareholders for the first half of this year.
The full-year 2021 dividend payment by the company is expected to be Dh2.57bn, consistent with its dividend policy, the company said in a statement to the Abu Dhabi Securities Exchange, where its shares trade.
This would translate to a 4.9 per cent annual dividend yield for the year, based on a share price of Dh4.16 as of Thursday.
Adnoc Distribution shares offer an “attractive value proposition” to shareholders and investors with a “combination of low exposure to oil price volatility, predictable and healthy cash flows, strong growth potential and an attractive dividend policy that offers high payback visibility”, said Bader Al Lamki, chief executive of Adnoc Distribution.
“Our progressive dividend policy demonstrates our commitment to our shareholders, as we advance our strategic priorities of steady and sustainable growth, enhanced customer experience and attractive capital returns,” he added.
The second and final dividend for 2021 is expected to be paid in April next year, the company said.
Since its initial public offering in 2017, Adnoc Distribution has consistently increased returns for its shareholders with dividends of Dh1.47bn in 2018, Dh2.39bn for 2019 and Dh2.57bn last year. The company set a minimum dividend payout of Dh2.57bn for 2022, compared to 75 per cent of distributable profit as per the previous policy.
“With our resilient business model, we are confident in our ability to pay an attractive dividend to our shareholders, while also maintaining significant capacity to deploy capital through a disciplined investment strategy,” said Mr Al Lamki.
Adnoc Distribution said it will focus on expanding its fuel station network and will invest in its non-fuel and international business expansion.
The fuel retailer opened 12 new retail fuel stations in the UAE in the first half of this year. The company also obtained no-objection certificates from the Saudi General Authority for Competition to acquire 35 new stations in the kingdom.
The acquisition of the stations in Saudi Arabia was announced in December and in February.
In the UAE, the company also refurbished 24 of its Adnoc Oasis convenience stores in the first half of the year.
In May, Adnoc Distribution joined the MSCI Emerging Markets index, which is tracked by funds with assets worth billions of dollars. It joins nine other UAE-listed companies that are part of the index.