Adnoc Distribution approves $350m dividend for first half of year

The second part of the expected full-year dividend payment of at least $700 million is set to be paid in April

Adnoc Distribution has said it is 'on track' to achieve its 2023 full-year target of adding between 25 and 35 new service stations to its network. Bloomberg
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The board of Adnoc Distribution, the UAE’s largest fuel and convenience retailer, has approved an interim cash dividend of Dh1.285 billion ($350 million) for the first six months of 2023, based on the company's "strong financial position".

The amount, which is equivalent to 10.285 fils per share, represents the first part of the expected full-year 2023 dividend payment of a minimum of Dh2.57 billion, or 20.57 fils per share, Adnoc Distribution said in a statement on Tuesday to the Abu Dhabi Securities Exchange, where its shares are traded.

The second and final dividend for 2023 is expected to be paid in April 2024, subject to approval.

The full-year dividend would offer a 5.4 per cent annual dividend yield, based on the share price of Dh3.80 as of September 25.

The company’s dividend policy for 2024 sets a dividend payout of a minimum of 75 per cent of distributable profits.

The deadline for purchasing shares to qualify for the interim dividend payment is October 3, the company said.

“Adnoc Distribution continues to offer an attractive value proposition to its shareholders, underpinned by our commitment to delivering on our smart growth strategy, future-proofing the business, and unlocking additional value from efficiency enhancements," said Bader Al Lamki, chief executive of Adnoc Distribution.

"Our strong balance sheet and consistent robust cash generation provide the foundation for efficient capital allocation towards future growth and shareholder returns."

Adnoc Distribution reported a 2 per cent annual increase in net profit for the first half of the year, excluding inventory movements, to Dh1.03 billion, on higher fuel volumes and efficiency initiatives.

Revenue between January and June rose 4.9 per cent on an annual basis to Dh16.13 billion. Underlying earnings before interest, taxes, depreciation and amortisation increased 9 per cent year-on-year to Dh1.57 billion.

Adnoc Distribution has been growing its presence and in the past five years, it has opened about 200 new service stations across the UAE and Saudi Arabia, expanding its Gulf network to 575 service stations.

In February, it also acquired a 50 per cent stake in TotalEnergies Marketing Egypt, adding 240 additional service stations to its network portfolio.

Last week, the company opened three service stations in Greater Cairo, marking the first time the company has opened its Adnoc-branded service stations in Egypt.

It also plans to launch another six in Egypt by the end of this year.

The company is also "on track" to achieve its 2023 full-year target of adding between 25 and 35 new service stations to its network, it said.

Adnoc Distribution has increased exports of its lubricants business, Adnoc Voyager, expanding its network to 32 global markets.

It is also exploring growth opportunities and revenue streams from the energy transition, including electric vehicle charging, the company said.

Outside fuel, it operates 351 Adnoc Oasis convenience stores, 33 vehicle inspection centres and other services including car washing.

“We will continue our proactive efforts to address evolving consumer needs and unlock new opportunities for growth," Mr Al Lamki said.

Since its initial public offering in 2017, the company has paid a total of Dh13.6 billion in dividends, including the amount for the first half of this year.

Updated: September 26, 2023, 6:28 AM