Abu Dhabi’s ADNOC Distribution posts 6.6% jump in first-quarter profit

ADNOC Distribution, the fuel distribution arm of Abu Dhabi National Oil Company (ADNOC), posted a 6.6 per cent rise in first-quarter net profit on Wednesday.

Profit was Dhs578m ($157.37m) in the three months to March 31, compared with Dhs542m a year earlier.

Analysts at Dubai-based Arqaam Capital had expected a profit of Dhs543m, while Egypt’s EFG-Hermes had forecast that the company would post a profit of Dhs558m.

ADNOC Distribution said net cash generated from operating activities decreased in the quarter as a result of working capital movements due to fluctuating oil prices.

It said it expected low single-digit growth in fuel volumes beginning in the second half of this year, as a result of an ongoing expansion of its network in Dubai.

HSBC on April 8 raised its recommendation to “buy” from “hold”, and target price to Dhs3.2 from Dhs2.6.

In 2017, ADNOC listed 10 per cent of ADNOC Distribution, the largest operator of petrol stations and convenience stores in the United Arab Emirates, on the Abu Dhabi Securities Exchange.

ADNOC is seeking a secondary listing for its distribution unit overseas, three sources told Reuters in April.

Reuters reported last June that ADNOC was considering selling another 10 per cent stake in ADNOC Distribution.

One of the sources said ADNOC was considering listing ADNOC Distribution on New York’s Nasdaq exchange, while a second source added that a London listing had also been discussed.

Another source said Abu Dhabi was also one of the options being discussed.