Abu Dhabi’s ADNOC Distribution, the UAE’s largest fuel and convenience retailer reported a 5% year-on-year (YoY) drop in net profits, due to lower inventory gains compared to the previous year.
The company’s net profits for the year stood at Dh2.60 billion ($708 million).
However, ADNOC Distribution’s earnings before interest, tax, depreciation and amortisation (EBITDA) grew 4.6% in 2023, crossing the $1 billion mark to reach a record $1.002 billion (Dh3.68 billion). The firm also reported a 15.4% YoY increase in underlying EBITDA.
The company added that revenue rose 8% YoY to Dh34.6 billion, driven by higher fuel volumes sold, and non-fuel retail segment contribution, partially offset by lower pump prices as a result of lower oil prices in 2023.
In 2023, the company generated a “strong” free cash flow of $1.1 billion (Dh4.0 billion), a 19% increase YoY and maintained a ‘robust balance sheet” with a net debt-to-EBITDA ratio of 0.62x as of 31 December 2023, ADNOC Distribution said in a statement.
In light of the results, Bader Saeed Al Lamki, CEO of ADNOC Distribution said the company’s board has approved a new five-year strategy for 2024-28. Th strategy includes “optimising existing assets to improve our profitability, doubling down on non-fuel retail, and generating new revenue streams offered by energy transition to future-proof our business and increase customer satisfaction.”
The company has also proposed the distribution of a dividend of Dh1.28 billion, equivalent to 10.285 fils per share, for the second half of 2023.
The company also recorded a double-digit increase in fuel volumes and non-fuel business, apart from rising contributions from international operations. Total fuel volumes grew by 11.8% YoY, retail volumes grew by 9.6%and commercial volumes up by 16.2%.
“2023 was a remarkable and transformative year for ADNOC Distribution,”Al Lamki said.
“Our team delivered on a critical commitment made to capital markets, underpinned by our focus on execution excellence, future-proofing the business, unwavering dedication to health safety and environment, and by our capability building and cultural transformation. This achievement is underscored by our focus on execution excellence and future-proofing the business.”
In 2023, the company surpassed its target of opening 25-35 new stations by launching 41 new service stations, bringing its total network to 840 service stations, of which 597 are located in the UAE and Saudi Arabia.
The company also opened the first nine ADNOC-branded service stations across Greater Cairo, Egypt, and acquired a 50% stake in TotalEnergies Marketing Egypt LLC.