ADNOC Gas’ annual pro forma net profit surges by 37%

ADNOC Gas, the gas business of ADNOC Group, said its net profit shot up by 37 per cent to $4.9bn on a pro forma basis in 2022, driven by increasing production capacity and a favourable pricing environment.

The company’s pro forma adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for 2022 came in at $8.7bn, a $2.1bn or approximately 32 per cent increase, compared to $6.6bn a year earlier.

ADNOC Gas attributed its profitability to higher pro forma adjusted revenue, which came in at $24.7bn last year, up 27 per cent or $5.2bn from $19.5bn in 2021.

“The increase was driven by strong market conditions supporting an improved pricing environment and an approximate 3 per cent increase in sales volumes during the period,” ADNOC Gas said in a bourse filing.

The Abu Dhabi-based company proposed a dividend of $3.25bn for the current financial year, ending December 31, 2023, and deliver a growth rate of 5 per cent per annum between 2024 and 2027.

“During FY 2022, we focused on increasing production capacity and driving efficiency across operations, which combined with the favourable pricing environment for natural gas, enabled us to deliver an approximate 3 per cent increase in sales volumes, pro forma adjusted revenue growth and a surge in pro forma adjusted net income,” said Ahmed Alebri, CEO of ADNOC Gas in a statement.

ADNOC Gas IPO

Meanwhile, ADNOC Gas’ unaudited combined pro forma results follow the company’s record initial public offering (IPO) on the Abu Dhabi Securities Exchange earlier in March 2023 – the largest ever IPO and listing in Abu Dhabi.

Read: Abu Dhabi’s ADNOC Gas surges on ADX trading debut

The company raised $2.5bn via IPO in what is the world’s biggest flotation this year after ADNOC Gas increased the number of ordinary shares offered in the public offering to 3.8 billion, representing 5 per cent of the company’s equity stake.

Retail investors put in orders for $23bn, over 58 times the shares reserved for them, the highest-ever level of demand for retail tranches in a MENA IPO to date.

Cornerstone investors including Abu Dhabi state-linked firms subscribed to $850mn worth of shares ahead of the final pricing announcement. Following the listing, ADNOC Group remains the controlling shareholder with 90 per cent in the unit while Abu Dhabi National Energy Company (TAQA) will retain its 5 per cent shareholding.

A newly founded company

ADNOC Gas was established in December 2022, following the merger of ADNOC’s gas processing and LNG operations into one of the world and market’s leading consolidated businesses effective January 1, 2023.

The gas company aims to achieve a daily gas processing capacity of 10 billion standard cubic feet across its eight onshore and offshore sites and a pipeline network of over 3,250 kilometres.

ADNOC Gas delivered 137,000 cubic meters of liquefied natural gas (LNG) to Germany in February, the first-ever natural gas cargo shipped to the country from the Middle East.

The cargo can produce approximately 900 million kilowatt hours of electricity, enough to supply approximately a quarter million German homes for a year. It also marks an important milestone in developing the European country’s domestic LNG supply infrastructure, supporting the country’s energy security with natural gas.

Read: Abu Dhabi’s ADNOC sets up new gas processing, operations and marketing entity

The recently founded company is expected to unlock significant financial and operational opportunities. It will be more agile, better able to respond to changing market demands, and well-positioned to take advantage of strategic opportunities for future growth. ADNOC Gas operates eight processing sites both onshore and offshore with a pipeline network of over 3,250km. Existing joint venture (JV) partners to ADNOC LNG (Mitsui & Co, bp and TotalEnergies) and ADNOC Gas Processing (Shell, TotalEnergies and PTTEP) are still continuing in their respective JV partnerships with ADNOC Gas.