Adnoc Gas, the integrated gas processing unit of Adnoc, posted a 21 per cent year-on-year increase in its second-quarter profit as a growing UAE population and expanding industrial sector fuelled higher sales.
The company’s net income rose to a second-quarter all-time record of $1.2 billion in the three months that ended in June, from $983.7 billion in the same period last year, Adnoc Gas said in a filing to the Abu Dhabi Securities Exchange on Monday, where its shares are traded.
Revenue rose 13 per cent to $6.1 billion in the second quarter, up from $5.4 billion in the same period last year, driven by stronger domestic gas demand growth.
Profits before interest, taxes, depreciation, and amortisation for the second quarter rose 18 per cent year-on-year to $2.09 billion.
The results “reflect our focus on growth, significantly strengthening revenue and profitability while continuing to maintain a healthy margin,” Ahmed Alebri, chief executive of Adnoc Gas, said.
“We are well positioned to pursue our ambitious growth agenda, underpinned by the strength, expansion, and ambition of the UAE market.”
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. 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.
Overall sales volumes grew 1 per cent year-on-year in the second quarter, with a "significant uplift" in liquefied petroleum gas (LPG) and Naphtha offset by liquefied natural gas (LNG), the company said.
The company’s domestic gas production volumes were flat in the April-June period, inching up to 580 trillion British thermal units (tbtu), compared to 575 tbtu in the same period last year, Adnoc Gas said in a report posted on the ADX.
Meanwhile, the volume of exported and traded liquids increased to 266 tbtu in the second quarter, up from 253 tbtu year on year.
Adnoc Gas provided a guidance for capital expenditure of $2 billion to $2.3 billion in 2024, revised from earlier estimates of $2 billion to $2.5 billion. This is due to transfer of ownership of the $2.4 billion gas pipeline extension project Estidama project to Adnoc, the company said.
Adnoc Gas expects global gas demand to rise by about 14 per cent by 2040, it said in the report.
The UAE's domestic gas demand growth will "significantly" exceed the pace of global growth, driven by an increase in the country's GDP and population size, as well as a series of government initiatives to attract new industries to the country, it said.
To cater to this demand, parent company Adnoc is building a new plant at Ruwais that will more than double the UAE’s LNG export capacity of the supercooled fuel to about 15 million tonnes per annum, when the plant begins operations in 2028.
About 70 per cent of the Ruwais LNG production capacity is secured through sales commitments, Adnoc Gas said.
Global LNG demand is projected to increase by more than 50 per cent by 2040, driven by industrial coal-to-gas switching in China and increased LNG use in South Asian and South-East Asian countries to support economic growth, according to Shell’s LNG Outlook report released in February.
