Adnoc Distribution has reported strong earnings for full-year 2022, with year-on-year growth in ebitda by 15% to AED3.52 billion ($958.4 million), and net profit by 22% to AED2.75 billion ($784 million) for 2022.
Announcing the annual results, the Abu Dhabi group said its total fuel volumes continued to increase during the year, recording an 8% year-on-year growth through 2022 – with commercial fuel volumes up by 19%.
Among the key factors contributing to the growth in fuel volumes are the continued economic expansion across the UAE, the ongoing Adnoc service station network expansion nationwide, and higher customer traffic.
Following the record earnings in 2022, Adnoc Distribution’s growth momentum is expected to continue through 2023 – a year in which the company is targeting to achieve a minimum $1 billion in ebitda – on the back of continued network expansion and higher non-fuel retail contribution.
In its ongoing quest to futureproof the business, Adnoc Distribution continues to explore potential growth opportunities and new revenue streams created through energy transition, including new mobility solutions such as electric vehicle charging, it stated.
On the results, CEO Bader Saeed Al Lamki said: "The company has demonstrated robust financial and operational performance throughout 2022. We have sustained our growth trajectory while generating strong cash flow and maintaining a solid financial position."
"Adnoc Distribution’s priority remains to accelerate achieving sustainable growth and building incremental shareholder value through efficient capital allocation, he stated.
According to him, Adnoc Distribution has successfully renewed its supply agreement with Adnoc for a new five-year term in 2022, reaffirming its strong value proposition driven by predictable margins and highly cash generative core business.
It also demonstrates strong and ongoing support from the majority shareholder, Adnoc.
The company continued its growth trajectory in 2022 by committing to deliver modern, digitally-enabled fuel retail convenience to customers and communities across the UAE.
Additionally, 68 new Adnoc service stations were opened in 2022 across the UAE and Saudi Aarabi, with 21 openings during the fourth quarter, including a state-of-the-art flagship location in the heart of Dubai on Shaikh Zayed Road.
The company’s international service station network reached a total of 568 sites, including 502 in UAE and 66 in KSA as of 31 December 2022.
Convenience store sales continued to gain momentum throughout 2022, with non-fuel retail transactions increasing by 15% during 2022. This was mainly driven by the company’s commitment to its non-fuel retail strategy, while focusing on offering an upgraded customer experience and modernizing the Adnoc Oasis retail space with of 42 additional stores refurbished.
Al Lamki said the year was marked by several milestones in Adnoc Distribution’s history, including the signing of its largest-ever international acquisition in Egypt.
"We also opened a flagship service station in Dubai – our first on Sheikh Zayed Road. Furthermore, we showcased our ability to provide a cutting-edge digitally-enabled customer experience, while also achieving long-term sustainable growth to generate attractive shareholder returns," he added.
Adnoc Distribution’s drive to deliver long-term shareholder value is underpinned by a commitment to futureproof the business, including initiatives such as the recently announced partnership with Taqa, one of the largest listed integrated utility companies in the EMEA region, to establish E2GO.
The new mobility joint venture will build and operate electric vehicle services infrastructure in Abu Dhabi and the wider UAE. The company also plans to expand its sustainability-driven efforts to futureproof the business, including installing solar panels to power service stations and use biofuels in its fleet of vehicles in 2023 and beyond.
In line with its approved dividend policy, the Company’s Board of Directors has recommended distributing a cash dividend of AED1.285 billion (10.285 fils per share), for the second half of 2022, which will be submitted to the company’s shareholders for approval at the Annual General Assembly Meeting scheduled for 2023.
Subject to shareholders’ approval, total dividend for the fiscal year 2022 is expected to be AED2.57 billion (20.57 fils per share). This would translate to a 4.6% annual dividend yield for 2022 (based on a share price of AED 4.44 as of closing on 8 February 2023).
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