Adnoc Distribution, the UAE’s largest fuel and convenience retailer, posted a more than 16 per cent annual rise in its first-quarter profit, boosted by its growth in Saudi Arabia.
Net profit attributable to equity holders in the three months ended March 31 hit Dh638.7 million ($174 million), driven by "strong underlying business profitability and lower finance costs", the company said on Tuesday in a regulatory filing to the Abu Dhabi Securities Exchange, where its shares trade.
Revenue for the quarter edged down 3.2 per cent annually to Dh8.47 billion, partially offset by reduced fuel prices as a result of lower global oil prices in the quarter on an annual basis, but lifted by a growth in fuel volumes and higher non-fuel retail segment contribution, the company said.
Oil prices have been volatile in recent months, with Brent, the benchmark for two thirds of the world's oil, and West Texas Intermediate, the gauge that tracks US crude, down by about 18 per cent so far this year.
"From an oil price perspective, we believe our business is sound and resilient across all our markets and, at the same time, our convenience business is not directly linked," Ali Siddiqi, the company's chief financial officer, told The National on Tuesday.
"In fact, lower fuel prices help our consumers ... it's linked to people coming into our stations, but it's not directly connected with the low oil price."
Meanwhile, the US-induced tariff war and weaker dollar has had a limited effect on the company, owing to its largely locally sourced supply chain, Mr Siddiqi said.
"Construction and equipment costs may see some upward pressure, but we don't see [tariffs] as a significant impact or a major threat to our operational costs at this stage," he added.
Adnoc Distribution said it achieved its "highest-ever first-quarter" fuel volume of 3.7 billion litres, "driven by market share growth, increasing demand and network expansion in the UAE, Saudi Arabia and Egypt".
The company opened 20 new service stations in the first quarter, bringing its network to 915 and keeping it on track to meet the target of between 40 and 50 new stations by the end of 2025, it said. In Saudi Arabia, the world's biggest oil-exporting country, Adnoc Distribution added 15 stations, growing its network to 115.
Non-fuel retail transactions also increased with gross profit rising 14 per cent annually in the period from January to March to reach Dh228 million.
Earnings before interest, taxes, depreciation and amortisation – a measure of profitability – rose 11 per cent compared with last year to reach Dh1.01 billion, a record for the first quarter and the highest since Adnoc Distribution's initial public offering in 2017.
"As we continue to expand our network and capabilities, adding new service stations and enhancing our customer experiences, we remain focused on capturing new opportunities and setting new benchmarks," said Bader Al Lamki, chief executive of Adnoc Distribution.
The company has been incorporating more technology into operations as part of efforts to improve its offering.
Mr Al Lamki told The National at last year's Gitex Global technology summit that the company was developing more than 20 tools powered by artificial intelligence to further optimise operations and enhance operational efficiencies.
Adnoc Distribution has also demonstrated its concept robotic arm for electric vehicle charging. But there are no plans to use the technology in the near future and the concept is aimed at future-proofing the company, Mr Al Lamki said at the time.
