Adnoc Gas adjusted net income rises 21% on higher gas sales in first quarter

The Abu Dhabi-listed company's revenue surged 15 per cent year-on-year to $6 billion

Adnoc Gas is the largest supplier of gas to the UAE’s petrochemical sector. Photo: Adnoc Gas

Adnoc Gas, the integrated gas processing unit of Adnoc, reported a 21 per cent annual increase in its first quarter adjusted net income as revenue grew during the period on the back of higher sales volumes of natural gas.

Adjusted net income for three months to the end of March rose to $1.18 billion, the company said in a statement on Tuesday to the Abu Dhabi Securities Exchange, where its shares are traded.

Adjusted net income excludes non-recurring deferred tax impact recorded by the company in the first quarter of last year.

Revenue surged 15 per cent year-on-year to $6 billion, driven by a “strong increase in demand in the UAE, which saw overall sales volumes increase by 14 per cent year-on-year,” the company said.

However, profit for the period fell about 7 per cent annually to $1.18 billion as a result of higher costs and expenses.

Profits before interest, taxes, depreciation, and amortisation (Ebitda) for the first quarter rose 17 per cent to $2 billion.

“Our strong profitability was backed by a high cash conversion rate where our free cash flow generation was up 47 per cent year-on-year to $1,183 million,” Dr Ahmed Alebri, chief executive of Adnoc Gas, said.

“Our robust cash flow generation will enable us to grow the annual dividend by 5 per cent to $3.41 billion in 2024, in line with our dividend policy.”

Adnoc Gas supplies to customers, mostly utilities and industrial companies in the UAE through an extensive network of pipelines.

It also produces a range of associated products, including ethane, butane and propane, paraffinic naphtha, gas condensate and sulphur that are sold to domestic and international customers.

Last year, parent company Adnoc raised about Dh9.1 billion ($2.5 billion) from the sale of a 5 per cent stake in the gas business in one of the largest initial public offerings last year.

Adnoc continues to own 90 per cent of the company, which has access to 95 per cent of the UAE's natural gas reserves, the seventh largest globally.

Adnoc Gas plans to grow internationally and acquire “new positions” in the gas value chain in Europe, India, China and South-East Asia to increase the UAE’s presence in international LNG markets and grow its business.

It aims to invest more than $13 billion in domestic and international growth opportunities between 2024 and 2028, the company said.

The investment plans from the company come as demand for natural gas is expected to rise globally amid decarbonisation efforts.

The global demand for natural gas will rise to 5.36 trillion cubic metres in 2050 from 4.02 trillion cm in 2022, driven by an increase in population and economic output as well as policies aimed at air quality enhancement and reduction in greenhouse gas emissions, the Gas Exporting Countries Forum said in its global gas outlook report in March.