Adnoc Distribution reveals plans for Egypt and Saudi Arabia

Reuters

• Plans for ‘evolving energy markets’
• Revenue up but profit down
• New dividend structure proposed

Adnoc Distribution, the UAE’s largest fuel and convenience retailer, plans to increase revenues from international operations in Saudi Arabia and Egypt.

The company is listed on the Abu Dhabi Securities Exchange and made the announcement during a presentation to investors on Monday when its share price fell slightly.

CEO Bader Saeed Al Lamki said it was “well positioned to take advantage of evolving energy markets and enter a new phase of growth”.

• Adnoc Distribution profit falls 5% in 2023
• Adnoc opens region’s first green hydrogen refuelling station
• Adnoc Distribution ready to explore Egypt after Total purchase

During 2023 the first nine Adnoc-branded service stations were launched across Greater Cairo. Adnoc Distribution operates more than 240 in the country under its acquisition of a 50 percent stake in TotalEnergies Marketing Egypt.

The company opened its first service station outside the UAE in 2018 when it launched in Saudi Arabia. It now operates 67 in the kingdom, out of a total network of 840. 

The board of directors has recommended the introduction of a new dividend policy for 2024-28 based on paying an annual dividend of $700 million or a minimum 75 percent of net profit, whichever is higher.

The proposal will be presented to shareholders for approval next month.

Investors were also told that Adnoc Distribution plans to scale up its portfolio of low-carbon energy products including a roll-out of 500 electric vehicle chargers across the UAE by 2028.

Al Lamki described 2023 as a “transformative” year for the company as it delivered EBITDA of more than $1 billion.

Net profit fell 5 percent to $708 million while revenue rose 8 percent year on year to nearly $9.5 billion, as a result of a double-digit increase in fuel volumes and non-fuel business.

Al Lamki said Adnoc Distribution will invest in its core UAE market while exploring opportunities in Saudi and Egyptian markets, supported by cashflow of over $1 billion as of the end of 2023. 

It is also targeting cost savings of up to $50 million by 2028 on top of the $130 million savings made in the previous four years.