Adnoc Distribution reports 9% rise in third-quarter profit on higher fuel volumes

Revenue for the reporting period climbed 4.5% annually to Dh8.94 billion

Adnoc Distribution, the UAE’s largest fuel and convenience retailer, opened 12 new service stations during the latest reported quarter. Antonie Robertson / The National

Adnoc Distribution, the UAE’s largest fuel and convenience retailer, reported a 9 per cent rise in third-quarter profit, boosted by a double-digit growth in fuel volumes sold.

Net income attributable to equity holders of the company for the three months to the end of September rose to Dh835.4 million ($227.5 million), the company said on Friday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue for reporting period climbed by 4.5 per cent on an annual basis to Dh8.94 billion.

“Our impressive third-quarter results are a testament to the continuous growth of our business as we witness strong momentum across both our fuel and non-fuel retail segments,” said Bader Al Lamki, chief executive of Adnoc Distribution.

“These results mark one of the strongest quarterly performances since our IPO [initial public offering].”

Total fuel volumes sold in the UAE and Saudi Arabia in the July-September quarter jumped about 21 per cent annually, driven by the company’s network expansion amid the region's sustained economic momentum.

Retail fuel volumes, which account for about 65 per cent of Adnoc Distribution's sales, increased by 14.5 per cent while commercial fuel volumes surged by 34 per cent.

The company's non-fuel business steadily expanded during the third quarter, with a 14 per cent increase in non-fuel retail transactions.

Adnoc Distribution has already achieved its 2023 full-year target of adding 25 to 35 new stations across its network and expects the business momentum to continue in the fourth quarter.

The company opened 12 new service stations during the third quarter, bringing its total network of stations to 828, of which 585 are in the UAE and Saudi Arabia.

Adnoc Distribution's net income in the first nine months of the year fell to Dh1.92 billion, from Dh2.34 billion, in the same period in 2022.

However, revenue during the same period rose by about 5 per cent to Dh25.07 billion.

Last month, Adnoc Distribution said it would use biofuel to power its heavy vehicle fleet in the UAE as part of its decarbonisation efforts.

The company's heavy vehicle fleet, which supplies fuel – including liquefied petroleum gas – to corporate customers, will be powered by the B20 biofuel, produced from waste cooking oil.

In September, Adnoc Distribution opened three service stations in Greater Cairo and announced plans to launch another six in Egypt by the end of the year as it continues to expand its international footprint.

The move followed the company's acquisition of a 50 per cent stake in TotalEnergies Marketing Egypt earlier this year.

The latest results “are driven by our commitment to creating value and attractive shareholder returns by implementing our smart growth strategy”, Mr Al Lamki said.

“This strategy includes the expansion of our domestic and international network, operational efficiency initiatives, investments in growth and the adoption of advanced technologies across our operations,” he said.

In January, Adnoc Distribution, and Abu Dhabi National Energy Company, better known as Taqa, announced a joint venture that will build and operate electric vehicle infrastructure in Abu Dhabi.

The new company, E2GO, aims to become the principal provider of EV charging points and associated infrastructure across the UAE capital.