Adnoc Distribution, the UAE’s largest fuel and convenience retailer, reported a 13 per cent increase in full-year profit on the back of lower costs.
Net profit for the period ending December 31, 2020, climbed to Dh2.4 billion ($661 million), the company said in a statement to the Abu Dhabi Securities Exchange, where its shares trade.
Direct costs fell by 37 per cent from a year earlier to Dh10.3bn while other impairment losses and expenses were up more than four-fold to Dh197m.
“We set ambitious growth targets for 2020 and it is testament to our resilient business model that we not only met but exceeded guidance in terms of both new station openings and convenience store refurbishments,” said acting chief executive Ahmed Al Shamsi.
The company is “well placed to continue building on recent success, in the UAE and beyond, in the year ahead" and remains on track to reach earnings before interest, taxes, depreciation and amortisation of at least $1bn by 2023, he said.
Adnoc Distribution plans to buy an additional 20 service stations in Saudi Arabia's central and eastern provinces for as much as $15.5m.
The new acquisitions will bring the company’s total network in the kingdom to 37 stations.
"During the fourth quarter of 2020, we announced the start of our further expansion into the kingdom of Saudi Arabia," said Mr Al Shamsi.
“These are important milestones for our company as we expand outside of the UAE and a key element of our profitable growth strategy too. We will continue to seek further international expansion opportunities and unlock incremental value for shareholders.”
Net profit grew by 71.5 per cent to Dh851m in the fourth quarter as operating income rose by 77 per cent to Dh902m. However, revenue declined by 24 per cent to Dh4.1bn during the period.
The company's board recommended a dividend of Dh1.285bn dividend, or 10.285 fils per share, for the second half of 2020.
This takes the full-year dividend to Dh2.57bn, or 20.57 fils per share, an increase of 7.5 per cent over the previous year.
The board also set a minimum dividend of Dh2.57bn for 2022.
