ADNOC Distribution’s Q1 net profit jumps 5.5% to Dhs551m

UAE’s ADNOC Distribution said its first-quarter net profit surged by 5.5 per cent year-on-year (YoY) to $150m (Dhs551m), driven by higher fuel volumes and efficiency improvement measures across all operations and businesses.

Quarterly, the energy provider said its net profit soared 19.4 per cent while free cash flow in the first three months of the year stood at Dhs1.04bn.

The company’s total fuel volumes for the UAE and Saudi Arabia rose by 8 per cent YoY in Q1 2023, supported by the continued rebound in economic activity and network expansion across the UAE.

ADNOC Distribution said retail fuel volumes – which account for 65 per cent of sales – increased by 5.5 per cent YoY while corporate fuel volumes jumped by 21 per cent increase compared to the same period a year earlier, driven by the initiatives being implemented by the company to bolster its commercial business portfolio through its business development and customer relationship management programs.

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In the first quarter of 2023, we delivered strong performance recording an increase in underlying profitability and maintained a strong balance sheet to support delivering sustainable attractive shareholder value, pic.twitter.com/kQgyDE0wVK

— ADNOC Distribution (@ADNOCdist) May 13, 2023

The company’s non-fuel business continued to gain momentum during the first quarter of 2023 with an 11 per cent YoY increase in recorded transactions and a 9 per cent YoY growth in non-fuel gross profit, supported by a series of marketing campaigns and customer-centric initiatives in line with the company’s non-fuel retail strategy.

“We focused our efforts during the first quarter of 2023 on streamlining operations across our local and international network while ensuring our cross-border teams were well-equipped to sustain the delivery momentum of our growth trajectory through 2023 and beyond,” said Bader Saeed Al Lamki, CEO of ADNOC Distribution.

The fuel retailer invested Dhs158m in Q1 2023 and plans to continue the growth momentum through the year by investing between Dhs918m and Dhs1.1bn to support the company’s expansion plans.

ADNOC Distribution’s growth forecasts

Meanwhile, 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 while focusing on sustainability-driven initiatives.

The company continued to expand its footprint in the UAE by opening six new service stations in the first three months of the year, bringing its nationwide retail fuel stations network to 507 as of March 31, 2023. It plans to add as many as 35 new service stations by the end of the year.

ADNOC Distribution’s expansion into Egypt marks another important milestone in the company’s broader strategy to expand its business into attractive international growth markets. It completed the acquisition of a 50 per cent stake in TotalEnergies Marketing Egypt for approximately $186m in February.

The partnership between ADNOC Distribution and TotalEnergies Egypt includes a diversified downstream portfolio of 240 fuel retail stations, over 100 convenience stores, 250+ lube changing stations and car washes as well as wholesale fuel, aviation fuel and lubricant operations.

Earlier in January,  the company partnered with Abu Dhabi National Energy Company (TAQA) to create a joint venture that will build and operate electric vehicle (EV) infrastructure in Abu Dhabi. The venture, E2GO, aims to become the principal provider of EV charging points and associated infrastructure across Abu Dhabi.

The energy provider is spearheading the roll-out of EV chargers in Q1 2023, having increased the charging points to 36 across the UAE. The assets will eventually be absorbed into E2GO.

Read: ADNOC to sell 15% stake in logistics unit in Abu Dhabi IPO