Adnoc Distribution posted strong earnings for the full year 2022, with EBITDA up 15% year-on-year to AED 3.52 billion (US$958.4 million) and net profit up 22% to AED 2.75 billion (US$ 784 million) in 2022.
Announcing its annual results, the Abu Dhabi Group said its total fuel volumes continued to grow during the year, growing 8% year-on-year in 2022, with commercial fuel volumes up 19%.
Key factors contributing to the fuel volume growth include the continued expansion of the UAE economy, the continued expansion of the Adnoc petrol station network across the country and higher customer traffic.
Following record earnings in 2022, Adnoc Distribution’s growth momentum is expected to continue through 2023 – the year the company aims to achieve at least $1 billion in ebitda – driven by continued network expansion and more High non-fuel retail contribution.
Adnoc Distribution said that in its ongoing search to future-proof its business, Adnoc Distribution continues to explore potential growth opportunities and new revenue streams created through the energy transition, including new mobility solutions such as electric vehicle charging.
Regarding performance, CEO Bader Saeed Al Lamki said: “The company has demonstrated strong financial and operational performance throughout 2022. We have maintained our growth trajectory while generating strong cash flow and maintaining a solid financial position. “
“Adnoc Distribution’s priority remains to accelerate sustainable growth and increase shareholder value through efficient capital deployment,” he said.
According to him, Adnoc Distribution has successfully renewed its supply agreement with Adnoc for a new five-year term in 2022, reaffirming its strong value proposition driven by predictable margins and a high cash-generating core business.
It also shows strong and continued support from major shareholder Adnoc.
The company continues its growth trajectory in 2022, focusing on providing modern, digital fuel retail convenience to customers and communities across the UAE.
In addition, 68 new Adnoc service stations opened in the UAE and Saudi Arabia in 2022, with 21 opening in Q4, including a state-of-the-art flagship store on Shaikh Zayed Road in downtown Dubai.
As of December 31, 2022, the company’s international gas station network totaled 568, including 502 in the UAE and 66 in Saudi Arabia.
Convenience store sales continue to gain momentum throughout 2022, with non-fuel retail transactions up 15% in 2022. This is mainly due to the company’s commitment to its non-fuel retail strategy while focusing on delivering an upgraded customer experience and modernizing the Adnoc Oasis retail space, which also has 42 refurbished stores.
Al Lamki said the year marked several milestones in Adnoc Distribution’s history, including the signing of the largest ever international acquisition in Egypt.
“We also opened our flagship service station in Dubai – our first on Sheikh Zayed Road. In addition, we demonstrated our ability to deliver a cutting-edge digital customer experience while achieving long-term sustainable growth to generate meaningful Attractive shareholder returns,” he added.
Adnoc Distribution’s drive to deliver long-term shareholder value is underpinned by a commitment to the future of the business, including initiatives such as the recently announced partnership with Taqa, one of the largest listed integrated utilities companies in EMEA, to establish E2GO.
The new mobility joint venture will build and operate electric vehicle service infrastructure in Abu Dhabi and the wider UAE. The company also plans to expand its sustainability-oriented efforts to future-proof the business, including installing solar panels for service stations and using biofuels in its fleet in 2023 and beyond.
In line with its approved dividend policy, the company’s board of directors has proposed a cash dividend of AED 1.285 billion (102.85 fils per share) in the second half of 2022, which will be submitted to the company’s shareholders for approval at the annual general meeting scheduled for 2023.
Subject to shareholder approval, total dividends for FY2022 are expected to be AED 2.57 billion (2.057 fils per share). This translates into an annualized dividend yield of 4.6% in 2022 (based on a share price of AED 4.44 at the close on 8 February 2023).