Company on track to enter Dubai and Saudi Arabia this year
Adnoc Distribution approves Dh735 million dividend
Adnoc Distribution, the UAE's biggest fuel distributor and convenience store operator, approved the payment of a Dh735 million to shareholders on Sunday.
The dividend, approved at Adnoc Distribution’s first annual general meeting after its initial public offering in December, works out at 5.88 fils per share.
“The IPO and recently announced fourth quarter and 2017 full year results illustrate that Adnoc Distribution is in a strong financial position, with an enhanced level of profitability, healthy margins and significant opportunities for future growth,” said Dr Sultan Al Jaber, Adnoc Distribution board chairman.
“The dividend payment that has been approved today is entirely in line with the dividend policy that we announced at the time of the IPO. The targeted dividend pay-out ratio puts us near the top of major listed companies in the region.”
Adnoc’s full-year 2017 net income climbed 1.3 per cent to Dh1.8bn from 2016. Revenue for the 12-month period rose 11.8 per cent to Dh19.76bn from 2016, while total assets at the end of 2017 came in at Dh12.2bn, up from Dh11.44bn in 2016. The company saw a 6.8 per cent increase in fourth-quarter profit, boosted by higher oil prices and an increase in fuel sales.
The company, which currently operates 360 service stations and 235 Oasis convenience stores in the UAE, saw total fuel volumes rise 6.5 per cent in the last three months of 2017 to 2.63bn liters compared to the same quarter of 2016.
Adnoc Distribution, which is valued at Dh31.1bn, sold 10 per cent of the company in the share float, the first listing on the Abu Dhabi bourse in more than six years. In January, the company said it will open its first service stations in Dubai and Saudi Arabia this year.
The company plans to enter Saudi Arabia through a franchise model, which will be the first of its kind for the fuel distributor. Expansion into Dubai, the only emirate where the company has no physical presence, is now feasible following changes to how fuel is priced, which were introduced across the UAE in August 2015.
As part of the expansion plans, Adnoc Distribution which holds a monopoly in Sharjah and Abu Dhabi, will roll-out at least 13 new service stations this year, and extend three of its existing facilities. John Carey, the deputy chief executive officer of Adnoc Distribution, told The National after the annual general meeting that the company would open three service stations in Dubai, more than initially planned for, and one in Saudi Arabia this year.
“We said before that we will open two sites in Dubai but we will open three and we have further expansion plans into Dubai,” he said. “We are on track and in a good position and the sites that we picked are great locations, great traffic and puts us in a strong position."
As part of its focus on profitability, Adnoc Distribution has reduced capital expenditure on a per site basis with projected capex costs for some future service stations have been reduced by as much as 40 per cent, without cutting corners on health and safety considerations, the company said.
The company also struck an agreement with Geant to re-brand and change product selection at 10 stores. It is also starting to give customers the option to pump fuel for themselves and is using technology to ease congestion at petrol stations by employing chips applied to fuel tanks that can automatically deduct payment for fuel.