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Adnoc Distribution Q3 2022 profit rises 45% to $209m

Adnoc Distribution
Convenience store sales continued to gain momentum, with non-fuel retail transactions increasing by 15% in 2022  

UAE fuel and convenience retailer Adnoc Distribution saw net profit rose 45 percent year-on-year to AED 767 million ($208.82 million) in the third quarter of 2022 and 39 percent year-on-year to AED 2.33 billion in the first nine months of 2022, the company said in a statement.

The Abu Dhabi-listed company saw a year-on-year rise of seven percent in total fuel volumes over the first nine months of 2022, driven by the UAE’s continued economic growth, increased traffic at service stations, and substantial increases in corporate fuel volumes, which rose 27 percent year-on-year.

In addition, Adnoc Distribution continued to see incremental volumes from its Dubai stations, with 37 sites now operational in the emirate and a total network of 481 stations across the UAE as of September 30, 2022.

The company’s non-fuel business continued to show strong growth over the first nine months of 2022, with an 18 percent increase in non-fuel transactions.

Non-fuel gross profit also increased by nine percent due to increased traffic at stations and higher food and beverage sales.

During the first nine months of 2022, Adnoc Distribution opened 21 new stations in the country, nine of which opened in the third quarter. 

Overseas Expansion

In its overseas expansion move, the company partnered with TotalEnergies to acquire a 50 percent stake in fuel retail operator TotalEnergies Marketing Egypt. The acquisition is expected to be completed in Q1 2023 following regulatory approvals.

The company’s growth momentum is expected to continue through the fourth quarter and beyond on the back of volumes growth, domestic and international expansion and higher non-fuel retail contribution.

Dividend Policy

Adnoc Distribution’s 2022 dividend policy is set at a minimum of AED 2.57 billion, offering an annual dividend yield of 4.6 percent at a share price of AED 4.47 as of November 10, 2022. 

The company paid a dividend of AED 1.285 billion for the first six-month of 2022 (10.285 fils per share) in October and expects to pay the second six-month dividend of 2022 (10.285 fils per share) in April 2023, subject to board and shareholders’ approval.