ADNOC Gas Q1 2023 Net Profit was announced in its first quarterly financial report after its creation and initial public offering (IPO) for Q1 2023, which ended on March 31, 2023. The unaudited pro forma financial results for the comparative period, which ended on March 31, 2022 (Q1 2022), were reported on a Pro Forma Adjusted basis.
ADNOC Gas Q1 2023 revenue reached $5.2B, whereas the Pro Forma Adjusted Revenue for Q1 2022 was $6.2B, affected by the pricing environment. ADNOC Gas achieved a high level of reliability throughout Q1 2023, with an average reliability rate of 98.5% across its facilities.
The company’s margin business is stable and durable, with ample opportunities for profitable growth. Despite the decline in Brent crude oil prices, which determine gas pricing, by nearly 24% compared to Q1 2022, ADNOC Gas demonstrated resilience and sustained a strong EBITDA margin of 34% in Q1 2023, just 1% lower than Q1 2022, according to WAM.
During the reporting period, the company utilized the prevailing market conditions to carry out planned asset maintenance activities, contributing to the continued world-class reliability and availability of its facilities while improving safety. These activities were finished on schedule and within budget, positioning ADNOC Gas for higher volumes in the second quarter.
In Q1 2023, the decrease in prices and volumes was mitigated by the lower cost of raw gas supply. ADNOC Gas benefits from a long-term gas supply agreement that provides dependable access to production from ADNOC’s upstream operations, allowing it to participate in any price increases while providing protection in a lower-price environment.
ADNOC Gas is capitalizing on the increasing worldwide demand for natural gas and is committed to expanding production capacity and improving operational efficiencies. As the company expands its export business, it achieved a significant milestone by delivering the first-ever LNG cargo from the Middle East to Germany in February, delivered from Abu Dhabi to the Elbehafen floating LNG terminal in Brunsbüttel.
In a recent announcement made in early May, ADNOC Gas signed a three-year agreement with TotalEnergies, a multinational energy company, to export LNG from 2023 to 2025, reinforcing the company’s position as a reliable global supplier of natural gas.
In Q1 2023, the net income amounted to $1.3B, compared to the Pro Forma Adjusted Net Income of $1.2B in Q1 2022. The Q1 2023 net income included a one-time non-recurring item of $300M derived from recognising a deferred tax asset following the company’s establishment. The Q1 2023 illustrative Free Cash Flow amounted to $1.1B, which was lower than the $1.4B in Q1 2022.
Ahmed Alebri, Chief Executive Officer of ADNOC Gas, commented, “ADNOC Gas has delivered robust financial results during Q1 2023, despite a significant contraction in market prices from the near-all-time highs experienced during 2022. Our performance during this period demonstrates our resilience and ability to generate attractive returns. We maintained a solid operating margin thanks to our ongoing focus on operational excellence and cost optimisation and reported healthy Net Income of $1.3B.”
“Importantly, we continue to execute on the growth strategy communicated during our IPO, underpinned by anticipated upstream capacity expansion and product mix optimization. We see long-term structural demand growth for natural gas as a critical fuel in the responsible global energy transition. We are ideally positioned to meet both local and international demand, while further decarbonising our operations in line with the UAE’s Net-Zero 2050 ambition.”
ADNOC Gas is making significant strides in executing its $14B strategic and growth project portfolio, which spans over the next five years (2023 to 2027). The portfolio comprises various projects aimed at improving operational efficiency and increasing production output.
One of the primary projects is to maximise ethane recovery and monetisation (MERAM) across operations. Additionally, the Company is extending the gas pipeline network by more than 500 kilometres to better connect the Northern Emirates of the UAE (ESTIDAMA) and constructing a greenfield gas processing facility co-located with a significant ADNOC upstream reservoir. This new facility is expected to add processing capacity of approximately 1.9 billion standard cubic feet per day (bscfd) to ADNOC Gas’ processing operations by 2028, at the earliest (Bab Gas Cap).
The Company is targeting to pay a dividend of $1.625B in Q4 2023 for the first half of 2023 and an additional $1.625B dividend in Q2 2024 for the second half of 2023. ADNOC Gas aims to increase the annual target dividend amount from $3.25B to a growth rate of 5% per annum on a dividend-per-share basis over 2024-27. The targeted dividend growth reflects the Company’s strong and visible future cash flows, providing room for long-term growth and stable returns for shareholders.
