Wednesday 30 September 2020
 
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Adnoc Distribution reports $248m net profit in H1

ABU DHABI, August 13, 2020

Adnoc Distribution has reported that its first half 2020 underlying earnings before interest, tax, depreciation and amortisation (EBITDA) stood at AED1.422 billion ($387 million), with net profit at AED910 million ($248 million).

For the second quarter, underlying EBITDA was AED793 million with net profit of AED511 million, a company statement said on Thursday.

Although the Covid-19 pandemic caused unprecedented market conditions in the first half of the year, the company remained resilient, delivering a 7.6 percent increase in underlying EBITDA for the first six months of 2020, compared to the first half of 2019.

Adnoc Distribution maintains a robust balance sheet and remains well-positioned to expand both its domestic and international portfolio in-line with its smart growth strategy. As June 30, 2020, the company’s liquidity was at AED5.2 billion in the form of AED2.4 billion in cash and cash equivalents and AED2.8 billion in unutilised credit facility.

Following the ease of lockdown and movement restrictions in the UAE, the company has experienced a recovery of fuel volumes. In July 2020, Adnoc Distribution’s retail fuel volumes recovered to 90 percent of volumes for the same period last year.

Adnoc Distribution also made significant progress in delivering its strategic smart growth plans during the first half of 2020. Twenty-five new stations were opened in H1, including 18 in Q2. The company remains on-track to deliver 50-60 new stations by year 2020, which includes 20-25 in Dubai.

Following the announcement of its new ‘On-the-go’ community station concept in November 2019, 17 new ‘On-the-go’ stations were brought into operation in H1 2020, with more coming soon.

Additionally, Adnoc Distribution continues to focus on offering a superior shopping experience to its customers through its c-store revitalisation programme, with 11 c-stores revitalised in H1 2020, 10 of which were successfully refurbished in Q2 2020. The company remains on track to refurbish 40-50 C-stores in 2020, a statement said.

Ahmed Al Shamsi, Acting CEO of Adnoc Distribution said: "I am very proud of the proactive course of action that Adnoc Distribution has adopted throughout the Covid-19 pandemic. Despite the challenging market conditions, we have continued to ensure access to our services, and introduced increased convenience.”

"We have seen fuel volumes recover in line with the easing of movement restrictions. We have maintained our smart growth strategy to expand our domestic footprint and ensure our network has a wider reach across the Emirates, particularly in the heart of neighbourhood communities, which previously did not have convenient access to refuelling services.

"Our ongoing focus to upgrade our digital solutions, particularly contactless payments, and widen our portfolio of products and services to expand our customer reach, has proven to be a success. We look forward to building on this through the introduction of further innovative products and services that allow our customers to enjoy ever-increasing levels of convenience that also encourage customer loyalty,” Al Shamsi added.

Furthermore, Adnoc Distribution implemented a range of measures to respond to customer needs due to the Covid-19 pandemic, including new services to protect staff and customers, such as daily deep-cleaning of its sites, the introduction of a new ‘daily essentials’ aisle, and car interior sanitisation.

Such increased customer-centric initiatives, improved category management, the introduction of fresh food and premium coffee offerings, alongside the impact of Covid-19, which saw customers purchase more but visit less frequently, contributed to an increase in average gross basket size of 19.7 percent in the first half of 2020 as compared to the first half of 2019.

Adnoc Distribution confirmed that its 2020 dividend policy is set to continue with an increase of 7.5 percent to AED2.57 billion, after a 62 percent increase in the 2019 dividend to AED2.39 billion. The company expects to pay the first six-month dividend of 2020 (10.285 fills per share) in October of this year, subject to board approval.

During its General Assembly meeting in March 2020, the company announced an amendment to its dividend policy for 2021 onwards, setting an AED2.57 billion dividend for 2021 and a dividend equal to at least 75 percent of distributable profits from 2022 onwards. – TradeArabia News Service




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