ADNOC Distribution, the biggest fuel and convenience retailer in the UAE, reported a 5.5% surge in its Q1 net profit compared to the same period last year. This growth was attributed to the rise in fuel volumes as well as enhanced operational efficiency measures.
In a statement to the Abu Dhabi Securities Exchange, where its shares are listed, the company reported a net profit of AED 551M ($150.05M) for the first quarter of the year, excluding inventory movements. Revenue during this reporting period also saw a significant increase, rising by 18.7% to almost AED 8B. Despite the growth in revenue, ADNOC Distribution emphasized that it maintained a solid financial position, generating a free cash flow of over AED 1.04B 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.”
The UAE and Saudi Arabia recorded an 8% YoY increase in their total fuel volumes as a result of economic recovery and network expansion across the Emirates, along with a substantial 21% rise in corporate fuel volumes in the period.
Meanwhile, retail fuel volumes, which make up 65% of sales, grew by 5.5% YoY. Additionally, ADNOC Distribution’s non-fuel business demonstrated growth in Q1 2023, with an 11% rise in non-fuel transactions and a 9% increase in non-fuel gross profit. In March, the company approved a total dividend of AED 2.57B for 2022.
Furthermore, ADNOC Distribution has been expanding its business into new sectors, including the formation of a joint venture with Abu Dhabi National Energy Company (Taqa) to construct and operate electric vehicle infrastructure in Abu Dhabi. The company also intends to decrease its carbon intensity by 25% by 2030. As of March 31, ADNOC Distribution had 507 retail fuel stations in the UAE and is well positioned to achieve its full-year expansion target of 25 to 35 new service stations, according to the company.
