Adipec 2023: Adnoc Distribution keen on 'right investment opportunity', CEO says

Exclusive: UAE’s largest fuel and convenience retailer is boosting decarbonisation efforts, Bader Al Lamki says

The Mena region is a priority for expansion, Adnoc Distribution chief executive Bader Al Lamki. Victor Besa / The National

Adnoc Distribution, the UAE’s largest fuel and convenience retailer, is looking for the "right investment opportunity" to expand its business, the company's chief executive has said.

Listed on the Abu Dhabi Securities Exchange, the company owns and operates more than 570 service stations in the UAE, Saudi Arabia and Egypt.

It is also active in the lubricants business with a presence in 32 countries.

Chief executive Bader Al Lamki told The National Adnoc Distribution is "constantly scouting" for suitable investments.

“We are very careful, we are very selective,” he said on the sidelines of Adipec in Abu Dhabi on Wednesday

"We would like to have the right opportunity where we can add value, but also maximise the return on investment to our shareholders."

He did not reveal new markets planned for expansion, but said the Mena region is a priority.

"Other regions are also candidates for investment as long as the investment opportunity meets our criteria," he said.

“What is important is that any market that we look at, it has to have the right regulatory framework, it has to have the demand as we look at supplying services.

“Geographies and countries that have good population growth, GDP [gross domestic product] growth, infrastructure, and that's what we saw when we went to Saudi Arabia with Vision 2030. That's what you are seeing in Egypt with the new cities that are being built and the infrastructure that is going on there.”

Earlier this year, Adnoc Distribution bought a 50 per cent stake in TotalEnergies Marketing Egypt, adding 240 additional service stations to its network portfolio.

Last month, the company opened three service stations in Greater Cairo, marking the first time the company opened Adnoc-branded service stations in Egypt.

It also plans to launch another six stations in Egypt by the end of this year.

Bader Al Lamki, chief executive of Adnoc Distribution. Victor Besa / The National

The company launched its operations in Saudi Arabia in 2018 and it owns 64 service stations in the Arab world's largest economy.

"We have the comfort of our ability to fund our growth, whether through equity or debt. So funding is not the issue today. The issue is to find the right investment opportunity that will maximise value for shareholders."

Adnoc Distribution reported a 2 per cent annual increase in net profit for the first half of the year, excluding inventory movements, to Dh1.03 billion, on higher fuel volumes and efficiency initiatives.

Revenue between January and June rose 4.9 per cent on an annual basis to Dh16.13 billion.

It is also boosting decarbonisation efforts in line with its parent Adnoc’s strategy, which aims to become net zero by 2045.

Adnoc Distribution on Wednesday announced it will use biofuel, produced from waste cooking oil, to power its heavy vehicle fleet in the country as part of efforts to reduce its carbon footprint.

Its heavy vehicle fleet, supplying fuels and liquefied petroleum gas to corporate customers, will be powered by B20 biofuel, it said.

“As a responsible company [that has] been in this business for 50 years, sustainability has been always central to everything that we do," Mr Al Lamki said.

“We made a public announcement at the beginning of this year and launched our sustainability roadmap, whereby we are targeting to reduce our carbon footprint by 25 per cent by 2030.”

Among other plans, the company plans to supply clean sources of energy to its service stations.

In May, it announced a key partnership with Emerge, a joint venture between Masdar and EDF, to develop on-site solar power across its service station network, starting in Dubai, to generate clean energy.

It also agreed with Abu Dhabi National Energy Company, better known as Taqa, to work together to establish a mobility joint venture, E2GO, to build and operate electric vehicle infrastructure in Abu Dhabi and the wider UAE.

“We were also the first fuel retailer in this region to secure a sustainability-linked loan beginning of this year, whereby we secured $1.5 billion of funding to support our business activities and grow, linked with sustainability goals from the financing community and that's also another testament of our seriousness to really develop and deliver actions that will help us reduce of carbon footprint," Mr Al Lamki said.