Adnoc Distribution profit falls 5% in 2023

Adnoc Distribution

Adnoc Distribution, the Abu Dhabi-listed fuel retailer, saw net profit fall 5.4 percent to AED2.6 billion ($707.87 million) in 2023, from AED2.75 billion in 2022, after lower inventory gains.

Revenue rose 7.8 percent year on year to AED34.63 billion, thanks to a double-digit increase in fuel volumes and non-fuel business.

The Abu Dhabi-listed fuel retailer generated a strong free cash flow of $1.1 billion (AED4.0 billion) while maintaining a robust balance sheet with a net debt-to-Ebitda ratio of 0.62x as of December 31, 2023.

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Net profit for the fourth quarter rose 61.4 percent to AED677 million from AED419 a year ago. Revenue jumped 16.8 percent year on year to AED9.56 billion. 

Adnoc Distribution’s board has approved a new five-year strategy for 2024-28, targeting the next phase of growth with a focus on sustainable mobility and convenience, said CEO Bader Saeed Al Lamki.

“It includes optimising existing assets to improve our profitability, doubling down on non-fuel retail, and generating new revenue streams offered by energy transition,” he said.

Total fuel volumes recorded an 11.8 percent year on year growth in 2023 in the GCC markets, with retail volumes growing by 9.6 percent and commercial volumes up by 16.2 percent year on year. This growth was underpinned by the ongoing network expansion, sustained momentum in the region’s economic growth, and higher mobility.

Adnoc Distribution passed its target of opening 25 to 35 new stations in 2023, launching 41 new service stations, bringing its total network to 840 service stations, of which 597 are located in the UAE and Saudi Arabia.

The company’s board recommended distributing a dividend of AED1.285 billion for the second half of 2023, which will be presented for shareholders’ approval in March. If approved, the total dividend for 2023 is expected to be AED2.57 billion.