$248 million in ADNOC Distribution’s profits in the first quarter
Abu Dhabi, 9 May / WAM / ADNOC Distribution today announced its financial and operational results for the first quarter of 2024, recording an 18 percent increase year-on-year in earnings before interest, tax, depreciation and amortization to reach $248 million, which confirms the company’s progress towards achieving its goals. Its new five-year strategy.
This progress came in the wake of the continued growth witnessed by the fuel and non-fuel retail sectors during the first quarter, as this period witnessed ADNOC Distribution developing several key initiatives, including the development of more than 20 initiatives powered by artificial intelligence to accelerate growth and enhance operational efficiency, such as the ‘ Fill & Go’ is a smart system that uses the latest technologies to accurately predict the level of future demand for fuel.
Engineer Badr Saeed Al Lamki, CEO of ADNOC Distribution, said that the strong results achieved by the company in the first quarter of the year, with an 18 percent growth in earnings before interest, tax, depreciation and amortization, are evidence of the effectiveness of the five-year strategy that the company recently announced, which Focused on local growth, international presence and future-proofing our business.
He added: “We are confident of a strong position to achieve our operational goals by 2028, expanding the network of ADNOC Distribution stations to 1,000 service stations, and increasing the number of electric vehicle charging points to at least 500 fast and ultra-fast charging points, in addition to increasing non-fuel retail sector transactions.” By 50 percent and the number of retail stores by 25 percent.”
Al Lamki said: “We are still continuing to integrate artificial intelligence technologies, which is an essential part of our strategy, as it has contributed to achieving tangible results across the various sectors of our business. For example, we employ our system based on artificial intelligence to predict the level of future demand in improving fuel delivery management.” Through our network of stations, through the use of specialized analyses.. This system is expected to contribute to reducing potential losses in sales by more than $27 million within five years.”
The company witnessed double-digit growth in earnings before interest, tax, depreciation and amortization compared to the same period last year, as the increase in shopping traffic through its station network contributed to enhancing the quantities of fuel sold and non-fuel retail sector transactions.
Net profit amounted to $150 million, compared to $146 million in the first quarter of 2023, despite the impact of the corporate tax in the UAE that was recently imposed. Net profit witnessed an increase of 13 percent to reach $165 million after excluding the impact of this tax.
The company also witnessed strong growth in its total profits for the non-fuel sector by 16 percent year-on-year to reach $55 million… while the company maintained a strong balance sheet with a net debt to EBITDA ratio of 0.50 times, which strengthens its position. Financially, it enables the company to invest in growth and achieve attractive returns for shareholders.
The most prominent features of the first quarter of 2024 include continued growth in the quantities of fuel sold in all the markets in which the company is present. The total quantities sold witnessed an increase of 17 percent on an annual basis thanks to the growth in the retail and commercial sectors.
The company witnessed an increase in the quantities of fuel sold in the Gulf Cooperation Council countries by 9 percent, as a result of the increase in customer shopping traffic in the company’s station network, the continued momentum of economic growth, and the expansion of the service station network, in addition to the increased contribution of the company’s operations in Saudi Arabia.
ADNOC Distribution opened eight new service stations in the first quarter of 2024, bringing the total number of service stations to 846. The company continues to progress at a steady pace towards achieving its annual goal of adding between 15 to 20 new service stations.
On the other hand, the non-fuel retail sector continues to witness continuous growth, with transactions recording a 7 percent increase across all service stations in the UAE.
According to its new growth strategy, ADNOC Distribution is working to efficiently direct capital towards the retail and transportation sectors in order to ensure the provision of a comfortable and comprehensive customer experience, making its stations the preferred destination for customers. The company’s services in the non-fuel retail sector were enhanced in the first quarter of this year, by During the opening of two new car wash centers with a much larger capacity than traditional centers.
It is planned to open eight additional car wash centers during this year, in addition to upgrading 50 percent of the automatic car wash centers by the end of 2024. The company also aims to double the number of stores leased by regional and international restaurant chains, which carry leading brands, in stations by the end of 2025.
As an essential part of its smart growth strategy, ADNOC Distribution works to employ digital innovations supported by artificial intelligence in all its business sectors with the aim of enhancing value and operational efficiency. The best example of this is its launch of the smart system for predicting fuel demand and the “Ful & Go” service, in addition to expanding the company’s network. Electric vehicle charging points.
In terms of operational efficiency, the smart system based on artificial intelligence and used by ADNOC Distribution to predict the level of future demand for fuel is characterized by extreme accuracy, as the accuracy rate exceeds 95 percent compared to traditional methods, which are about 60 percent accurate… which contributed to reducing imbalances. In fuel inventory effectively, and in improving the accuracy of demand forecasts in reducing the overall carbon emissions from fuel distribution trucks by 10 percent, thanks to improved delivery timing efficiency, which is consistent with the company’s efforts to reduce the carbon emissions intensity of its operations by 25 percent by The year is 2030.
The company is striving to prepare its business for the future through a deliberate and disciplined plan to install fast and ultra-fast charging points for electric vehicles.
The company witnessed a significant increase in the number of charging points in the first quarter of 2024, reaching 89 charging points, representing a growth of 68 percent compared to the fourth quarter of 2023. This expansion included the establishment of the specialized transportation center in Masdar City.
ADNOC Distribution seeks to double the total number of electric vehicle charging points to reach between 150 and 200 points by the end of 2024.
ADNOC Distribution has achieved attractive investment returns for its shareholders amounting to approximately 90 percent since the initial public offering in 2017, through increasing market value and dividends.
The company also succeeded in fulfilling its commitment to the financial markets by recording EBITDA exceeding $1 billion in 2023, paving the way for the next phase of accelerated growth. The company is exploring value-accumulating local and international growth opportunities, including entering new markets to create additional value for its shareholders.
ADNOC Distribution is adopting a new growth strategy that includes thoughtful expansion plans supported by a strong financial budget and ample cash flows, through a plan to invest between $250 to $300 million in capital expenditures during the year 2024, where 70 percent of these investments will be allocated to growth projects. The company has actually invested $46 million from the planned budget during the first quarter of 2024. This strategic allocation of investment in promising growth projects aims to enhance value and achieve rewarding returns for shareholders.
The company’s shareholders also approved the new five-year dividend distribution policy during ADNOC Distribution’s annual general assembly meeting last March, which stipulates the distribution of annual dividends amounting to $700 million or at least 75 percent of net profits, whichever is higher, as this policy provides vision. Clear about future returns and provides the opportunity to increase profits in the future.
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