ADNOC Distribution reports Dhs2.4 billion net profit
- 15 Feb 2021
ADNOC Distribution on Monday today reported that its net profit for the fourth quarter of 2020 grew to Dhs851 million, with underlying EBITDA (EBITDA excluding one-offs and inventory gains/losses) of Dhs1.1 billion. For the year 2020, net profit was Dhs 2.4 billion, while underlying EBITDA stood at Dhs3.6 billion.
ADNOC Distribution has maintained a strong balance sheet as of 31st December, 2020, and remained well-positioned to expand both its domestic and international portfolio in-line with its smart growth strategy, as well as meet its dividend commitments.
As of 31st December, 2020, the company’s liquidity was at Dhs5.6 billion in the form of Dhs2.8 billion in cash and cash equivalents and Dhs2.8 billion in unutilized credit facilities.
Following a 24 percent quarter-on-quarter increase in total fuel volumes in Q3 2020, volumes for the fourth quarter of 2020 increased 2 percent compared to the third quarter of 2020.
During the year, ADNOC Distribution opened 64 new stations, ahead of its guidance to the market of 50-60 new stations; a rate of delivery ten times that of 2019.
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There was a significant increase in ADNOC Distribution’s network in Dubai in 2020, with 20 new service stations opened in the emirate.
The company also added a sizeable number of new ‘ADNOC On the Go’ stations. A total of 38 were opened in 2020 across the country.
Also, a total of 100 ADNOC Oasis convenience stores were refurbished throughout the year, above the market guidance of 80-90.
In addition to its growth in the UAE, international expansion was accelerated with the announcement that the company had signed a definitive agreement on 30th December, 2020, to acquire 15 service stations in the Kingdom of Saudi Arabia. The acquisition is subject to certain conditions (including obtaining regulatory approvals) and stems from ADNOC Distribution’s long-term smart growth strategy.
This transaction has been quickly followed by the announcement today of the execution of two further definitive agreements to acquire a total of 20 stations in KSA, which transactions are subject to certain conditions (including obtaining regulatory approvals).
The two transactions consist of 20 service stations in the Eastern, Central and Riyadh Provinces of KSA with a total purchase consideration of up to Dhs56.9 million (US$15.5 million). The new transactions will bring the company’s total network to 37 stations.
Ahmed Al Shamsi, Acting Chief Executive Officer of ADNOC Distribution, said, "We set ambitious growth targets for 2020 and it is testament to our resilient business model that we not only met, but exceeded guidance in terms of both new station openings and convenience store refurbishments.
"ADNOC Distribution is well placed to continue building on recent success, in the UAE and beyond, in the year ahead and remains on track to reach EBITDA target of at least US$1.0 billion by 2023. We will continue to seek further international expansion opportunities and unlock incremental value for shareholders."
ADNOC Distribution enhanced its customer-oriented approach throughout 2020. In July, The company’s ADNOC Rewards, the UAE’s first customer loyalty programme from a fuel provider, was upgraded to allow customers to further benefit from their purchases at its outlets by earning points on every dirham spent.
The programme reached the significant milestone of having one million registered customers during the fourth quarter. The total number of transactions using ADNOC Rewards, since the company launched the points programme, has now exceeded 8 million.
Providing increased convenience to customers was integral to the Company’s core strategy, particularly through the acceleration of its e-commerce strategy. It expanded its flagship partnership with delivery services Talabat and Carriage, which allows customers to order from more than 1,700 ADNOC Oasis products, from over 100 convenience stores across the UAE.
ADNOC Distribution’s board commended the management for vaccinating 100% of frontline station staff to ensure the safety and wellbeing of customers and employees, as well as praising government entities who supported the process.
WAM
