Adnoc Distribution, the UAE’s largest fuel and convenience retailer, said its first-half earnings and revenue jumped on the back of higher fuel volumes and improvements in efficiency.
Revenue in the January-June period rose 4.9 per cent on an annual basis to Dh16.13 billion ($4.4 billion), the company said on Friday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
The company's underlying earnings before interest, taxes, depreciation and amortisation surged 9 per cent year-on-year to Dh1.57 billion.
The higher earnings were driven by “strong operating performance and efficiency improvement initiatives across the company”, said Bader Al Lamki, chief executive of Adnoc Distribution.
“As a future-focused business, we remain on track to meet targets for the year in Opex [operational expense] savings and network expansion locally and internationally, and expect this growth momentum to continue into the second half of the year.”
The company said its financial position remained strong with a liquidity of Dh4.7 billion at the end of June.
The company’s net profit attributable to equity holders dropped 30.3 per cent on an annual basis to more than Dh1.08 billion in the first half of the year. This was due to lower Ebitda on the back of significantly lower inventory gains compared to H1 last year.
However, net profit excluding inventory movements for the first half was up 2.1 per cent to Dh1.03 billion. This was supported by volume growth, higher contribution from non-fuel retail business and companywide efficiency initiatives.
Net income in the second quarter of the year fell 38 per cent to Dh551 million, while revenue dropped to Dh8.13 billion from Dh8.63 billion in the same period last year.
Adnoc Distribution’s total fuel volumes in the UAE and Saudi Arabia witnessed a 9 per cent increase in the first half of the year.
Retail fuel volumes, which account for about 70 per cent of the total volumes, increased by 8 per cent year-on-year, while the company’s corporate fuel volumes recorded sustained growth, achieving a 12 per cent yearly increase driven by the management’s efforts to strengthen the commercial business portfolio, Adnoc Distribution said.
The company’s non-fuel business continued to show strong performance, with gross profit increasing by more than 12 per cent in the first half of the year. It was primarily driven by a 14 per cent increase in transactions and achieving a record-high conversion rate in convenience stores.
The company expects to pay Dh1.28 billion dividend for the first half, subject to board approval and in line with its dividend policy. Its new dividend policy approved at the general assembly meeting in March sets a minimum dividend of Dh2.57 billion for 2023.
Adnoc Distribution opened 13 new service stations in the UAE in the first half of the year, including three in Dubai. Its domestic network expanded to 511 service stations – with 42 in Dubai – as of June 30.
The company said it is well positioned to achieve its full-year target of expanding the network with 25 to 35 new service stations.