Adnoc Distribution included in FTSE Emerging Markets Index
- 22 Aug 2021
Adnoc Distribution on Sunday announced that it will be included in the FTSE Emerging Markets (EM) Index, from Sept.16, 2021 (close of business). Inclusion is subject to final confirmation by FTSE on Sept.6.
Adnoc Distribution was included in the FTSE EM Index by FTSE Russell after meeting the requirements and will now be part of this widely tracked index, a go-to for global institutional investors. The inclusion is expected to increase the attractiveness of Adnoc Distribution’s shares to potential international investors and further diversify the company’s overall investor base, a company press release said on Sunday.
Bader Saeed Al Lamki, CEO of Adnoc Distribution, said, “Following the inclusion of Adnoc Distribution in the MSCI EM Index in May 2021, the FTSE EM Index marks another important milestone in Adnoc Distribution’s successful equity story. This will continue to enhance the company’s investment appeal and visibility among global investors, attracting more foreign inflows into Adnoc Distribution shares.
“The inclusion is a testament to the company’s growth story and its strong standing within the fuel retail sector. Our continued focus is to provide modern fuel retail convenience to customers, deliver on our ambitious strategy, and build long-term shareholder value through the next phase of our expansion,” he added.
In September 2020, Abu Dhabi National Oil Company (Adnoc) completed a private placement of 1.25 billion of Adnoc Distribution shares (valued at $1 billion) to institutional investors, increasing the Company’s free-floating equity to 20 per cent. In May 2021, Adnoc placed an additional 3 per cent of Adnoc Distribution’s share capital (valued at $445 million), increasing free float further to 23 per cent.
It also issued approximately $1.195 billion of senior unsecured bonds (Exchangeable Bonds) due 2024, exchangeable into existing shares of Adnoc Distribution, constituting approximately 7 per cent of the registered share capital of Adnoc Distribution under certain conditions.
Following the transactions, Adnoc will retain at least a 70 per cent strategic stake in the company as it continues to see significant growth potential in Adnoc Distribution.
These equity placements leveraged significant investor demand for Adnoc Distribution shares, driven by its attractive value proposition. These transactions also diversified the company’s shareholder base and allowed for greater liquidity of its shares on the Abu Dhabi Securities Exchange.
Meanwhile the Adnoc Distribution, the UAE’s largest fuel and convenience retailer, which is listed on the Abu Dhabi Securities Exchange (ADX), on Tuesday reported that its first half 2021 EBITDA stood at Dhs 1.53 billion, with net profit of Dhs1.15 billion. For the second quarter, EBITDA was Dhs 712 million with net profit of Dhs 521 million.
The strong results were driven by higher fuel volumes, improvement in non-fuel and commercial gross profit margin and increased operational efficiencies made in the first half of 2021. The company’s fuel volumes saw progressive recovery towards pre-COVID levels, an indication of improving consumer sentiment following the successful vaccination drive across the UAE. In addition, the company continues to add incremental volumes from its Dubai stations alongside a proactive sales strategy in its corporate business.
Operationally, as part of its ongoing transformation, the company remains committed to reducing operating costs and ensuring competitiveness in the UAE fuel retail and convenience store sector. Throughout the first half of 2021, Adnoc Distribution’s operational expenditure (excluding depreciation) decreased by 1 per cent compared to H1 2020.
Adnoc Distribution continues to maintain a robust balance sheet and remains well-positioned to expand both its domestic and international portfolio in-line with its smart growth strategy.
During the first half of 2021, Adnoc Distribution continued to deliver on its promise to bring modern, digitally-enabled fuel retail convenience to customers and communities domestically and internationally, with the opening of 12 new stations in the UAE. In H1 2021, the company received no objection certificates from the Saudi General Authority for Competition (GAC) to acquire 35 stations in Saudi Arabia, which deals were previously announced in December 2020 and February 2021. Adnoc Distribution remains committed to bringing modern fuel and retail convenience to customers and communities across the Kingdom.
Building on the momentum achieved in 2020, Adnoc Distribution has also continued to provide a modern, digital experience to customers. This includes enhanced payment options, including through the Adnoc Distribution app, which offers a fully-contactless customer experience, and the growing popularity of its online delivery service, available through Talabat and Carriage from more than 100 Adnoc Oasis stores across the UAE. In addition, to further support of the company’s ambitious non-fuel retail strategy, a total of 24 Adnoc Oasis convenience stores were refurbished throughout the first half of 2021.
