Adnoc Distribution, the UAE’s largest fuel and convenience retailer, has struck three new deals with its parent Adnoc as part of its growth strategy which focuses on product diversification.
The company entered into an agreement with Adnoc for the sale of base oil, which it will purchase until the end of 2026, Adnoc Distribution said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
The new deal replaces one that was scheduled to expire at the end of this year. It will provide the company with higher volumes, it said.
Adnoc Distribution also struck a white spirit supply agreement with Adnoc to help the company increase its market share in the long term.
“This is part of Adnoc Distribution’s smart growth strategy in the commercial business, which includes horizontal diversification,” it said. The contract will expire at the end of 2026.
The company also entered into a new carbon black supply agreement with Adnoc, which will run until the end of this year.
“The contract enables Adnoc Distribution to test the market in carbon black,” it said.
White spirit is a petroleum-derived liquid used as a solvent in painting, while carbon black is used in tyres and rubbers.
Adnoc Distribution, which operates 464 retail fuel stations and 350 convenience stores in the UAE as of March 31, has been expanding its portfolio.
It reported a more than 6 per cent increase in its first-quarter profit to Dh671 million ($182.8m) as a result of higher revenue.
Revenue for the reporting period surged more than 57 per cent to Dh6.74 billion, driven by higher fuel selling prices amid a rise in crude prices globally. Growth in both fuel volumes and non-fuel business boosted revenue.
The company also operates 55 retail fuel stations in Saudi Arabia.
In March, the company's shares were included in the FTSE ADX 15 Index that represents the top 15 companies on the ADX main market.
Last year, Adnoc Distribution also joined the MSCI Emerging Markets index, which is tracked by funds with assets worth billions of dollars.