Abu Dhabi, UAE — ADNOC Distribution Friday announced a 28 percent year-on-year (Y-o-Y) increase in EBITDA to $303 million (AED1.1 billion) and a 9 percent Y-o-Y increase in net profit to $227 million (AED835 million) for the third quarter of 2023.
The results are among the strongest since the Company’s initial public offering (IPO) in 2017, supported by double-digit growth in fuel volumes and non-fuel business, efficiency improvement initiatives, and a growing contribution from international operations, ADNOC said in a statement.
ADNOC Distribution witnessed a healthy 21 percent Y-o-Y increase and a 5 percent quarter-on-quarter (Q-o-Q) growth in total fuel volumes sold in the GCC region (UAE and Saudi Arabia). This growth was driven by the Company’s ongoing network expansion and sustained economic growth in the region.
In Q3 2023, ADNOC Distribution generated free cash flow of $394 million (AED1,447 million) and maintained a strong balance sheet with a net debt-to-EBITDA ratio of 0.67x as of 30th September 2023, providing support for future growth prospects and shareholder returns, the statement said.
Bader Saeed Al Lamki, CEO of ADNOC Distribution, said, “These results mark one of the strongest quarterly performances since our IPO. They are driven by our commitment to creating value and attractive shareholder returns by implementing our smart growth strategy. This strategy includes expanding our domestic and international network, operational efficiency initiatives, investments in growth, and adopting advanced technologies across our operations to deliver a superior customer experience.”
The Company’s non-fuel business recorded consistent growth in Q3 2023, with 14 percent Y-o-Y increase in non-fuel retail transactions, profitability, and a surge in convenience store conversion rate to 24 percent from 21 percent in Q3 2022, indicating that more of our customers are now shopping at our convenience stores when they visit to buy fuel.
Since its launch, the ADNOC Rewards loyalty programme has expanded and now reaches more than 1.8 million enrolled members, marking a 14 percent increase compared to Q3 2022.
ADNOC Distribution’s 2023 dividend policy sets a minimum of $700 million (AED2.57 billion), equivalent to 20.57 fils per share in dividend for the full year 2023, providing an annualized yield of 5.9 percent (at a share price of AED3.46 as of 9th November 2023).
The Company disbursed a dividend of $350 million (AED1.285 billion), or 10.285 fils per share, for the first six months of 2023 in October 2023.
It anticipates paying a minimum of $350 million (AED1.285 billion), or 10.285 fils per share, as the second six-month dividend of 2023 in April 2024, subject to the discretion of the board and shareholder approval.
The Company’s dividend policy for the years thereafter sets a dividend of at least 75 percent of distributable profits. ADNOC Distribution’s dividend policy recognizes the Company’s strong financial position and its ability to generate cash flow in the future.