Adnoc Distribution's second-quarter net profit surges 71% on revenue boost

Adnoc Distribution, the UAE’s largest fuel and convenience retailer, said its second-quarter net profit surged 71 per cent as revenue rose on the back of strong growth in fuel sales. Net profit for the three months to the end of June rose to Dh891 million ($242.61m), the company said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded. Revenue for the reporting period jumped 72 per cent to Dh8.63 billion, driven by higher fuel selling prices amid a rise in crude prices globally. Higher volumes of fuel sold, as well as a rise in non-fuel business, also supported quarterly revenue. Net profit for the first six months of the year rose to Dh1.56bn, up 35.6 per cent from the same period last year. Half-yearly revenue surged more than 65 per cent to Dh15.3bn over the prior year period. "We have demonstrated a healthy performance, with consistent growth and a strong balance sheet to support further growth investments and to sustain attractive capital distribution to our shareholders," said Bader Al Lamki, chief executive of Adnoc Distribution. “In the first half of 2022, we have maintained a strong financial and operational performance while integrating cutting-edge solutions to our customer-focused offerings." Adnoc Distribution said its fuel volumes grew 9 per cent annually in the first half of 2022, driven by its commercial and retail businesses. Corporate fuel volumes in the six-month period also grew 27 per cent year-on-year, driven by the new corporate fuel sales agreements confirmed last year. The UAE economy, which has bounced back strongly from pandemic -driven headwinds, has carried growth momentum into this year. The Arab world's second-largest economy is set to post its strongest annual expansion since 2011 after it grew by 8.2 per cent in the first three months of this year. Higher oil prices that helped the UAE's economic momentum this year have also supported energy and fuel retailing businesses in the country. Adnoc Distribution expects the positive volume growth and earnings momentum to continue in the second half of this year and beyond. It remains committed to pursuing its "expansion plans in a disciplined manner" and to optimise operations as it pursues its target of reaching a minimum Dh3.67bn in earnings before interest, taxes, depreciation and amortisation by 2023. Last month, Adnoc Distribution said it is acquiring a 50 per cent stake in TotalEnergies Marketing Egypt for approximately $186m as part of its global expansion plans. Under the deal signed with TotalEnergies Marketing Afrique, the Abu Dhabi company also has the provision for additional earn-out of up to $17.3m if certain conditions are satisfied. The overall deal marks the Abu Dhabi company's largest investment to date, with the acquisition expected to be completed in the first quarter of 2023, it said at the time . “Our entry into Egypt will mark a significant milestone in the company’s journey that will help unlock new earnings potential through a diversified portfolio, further contributing to our financial performance," Mr Al Lamki said on Monday. Adnoc Distribution also continued to expand its geographical footprint in the first six months of this year, adding 38 new stations in the UAE and Saudi Arabia . The company expects delivery momentum to continue and it remains on track to open 60 to 80 new stations before the end of 2022. Out of those, Adnoc is planning to open 20 to 30 stations in the UAE, 10 to 15 of which will be located in Dubai , offering "high growth potential for the company to gain market". With a portfolio of 64 stations in Saudi Arabia since the beginning of 2021, the company is exploring all options including acquisitions, lease agreements and greenfield projects, as it continues to push for expansion in the Arab world's biggest economy. Adnoc said it expects to invest approximately Dh918m in capital expenditure this year, which does not include potential investments for merger and acquisition deals.

Adnoc Distribution's second-quarter net profit surges 71% on revenue boost

Growth in the company's fuel volumes and non-fuel business boosts income