Adnoc Distribution's Q1 net profit jumps 5.5% on higher fuel volumes

The fuel retailer had free cash flow of more than Dh1.04 billion during the first quarter

Adnoc Distribution's first-quarter revenue jumped 18.7 per cent to almost Dh8 billion. Photo: Adnoc

Adnoc Distribution, the UAE’s largest fuel and convenience retailer, said its first-quarter net profit jumped 5.5 per cent on an annual basis, driven by higher fuel volumes and efficiency improvement measures.

Net profit for the three months to the end of March, excluding inventory movements, rose to Dh551 million ($150.05 million), the company said on Friday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue for the reporting period jumped 18.7 per cent to almost Dh8 billion.

Adnoc Distribution said it continued to maintain a strong balance sheet and had a free cash flow of more than Dh1.04 billion during the period.

“We focused our efforts during the first quarter … on streamlining operations across our local and international network while ensuring our cross-border teams were well-equipped to sustain the delivery momentum of our growth trajectory through 2023 and beyond,” said Bader Saeed Al Lamki, chief executive of Adnoc Distribution.

“At the same time, we maintained a healthy cash flow generation and strong financial position to deliver incremental shareholder value through efficient capital allocation.”

Total fuel volumes for the UAE and Saudi Arabia jumped 8 per cent on an annual basis on the back of the continued rebound in economic activity and network expansion across the Emirates, and a substantial increase in corporate fuel volumes, which rose 21 per cent year-on-year during the period.

Retail fuel volumes — which account for 65 per cent of sales — increased by 5.5 per cent year-on-year.

The company’s non-fuel business continued to show growth over the first three months of the year, with an 11 per cent increase in non-fuel transactions. Non-fuel gross profit also increased by 9 per cent.

In March, Adnoc Distribution approved a total dividend of Dh2.57 billion for 2022.

In February, the company completed the acquisition of a 50 per cent stake in TotalEnergies Egypt, marking the Abu Dhabi company's entry into Egypt.

Adnoc Distribution has also been entering new sectors.

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

During the same month, the company said it also planned to reduce its carbon intensity by 25 per cent by 2030.

Adnoc Distribution’s network stood at 507 retail fuel stations in the UAE as of March 31. It remains well positioned to achieve its full-year network expansion targets of 25 to 35 new service stations, the company said.