ADNOC Distribution acting CEO Saeed Mubarak Al Rashdi says the company is on track to hit $51m in cost savings in 2018
ADNOC Distribution is “on track” to achieve cost savings of approximately AED 190 million in ($51.73 million) in 2018, according to ADNOC Distribution acting CEO Saeed Mubarak Al Rashdi.
Al Rashdi’s comments came as the company reported a net profit of AED 1.12 billion ($369.69 million) in the first half of 2018, an 18 percent increase from the same time period in 2017.
According to financial results published by the company on Monday, earnings before interest taxes depreciation and amortisation (EBITDA) grew by 30 percent to AED 1.44 billion ($392.02 million), while gross profit rose 24 percent to AED 2.6 billion ($707.82 million).
Free cash flow (EBITDA minus capital expenditures) generation rose 72 percent year-on-year to AED 1.11 billion ($302.18 million) in H1.
Commenting on the results, Al Rashdi said that the company has “made progress in all three of our strategic pillars: fuel, non-fuel and cost-efficiency.”
Quarter-on-quarter, the company’s net profit in Q2 went up 24 percent compared to Q2 2017, while gross profit increased by 33 percent and gross profit margin rose to 25 percent, up from 22 percent in the same time period in 2017.
The ADNOC Distribution results indicated that total fuel volumes sold during H1 2018 were 4.76 billion litres, a 1 percent decrease compared to the same time period last year.
“ADNOC Distribution’s second quarter and half-year results reflect our continued progress towards delivering on our strategy,” Al Rashdi said, adding that cost savings have been achieved even as the company grew its station network and “without impacting safety, quality and our customer experience.”
The company unveiled a number of operational initiatives during Q2, including the implementation of ADNOC Flex, the launch of two new retail brands - Géant Express convenience stores and Oasis Café coffee shops and bakeries – as well as the opening of eight new service stations and 10 new convenience stores since last year’s second quarter.
Additionally, ADNOC Distribution also installed an additional 69,000 RFID-enabled Smart Tags during Q2 as part of its ADNOC Wallet cashless payment system, bringing the total installed base of smart tags to more than 180,000.
“ADNOC Distribution continues to demonstrate strong and profitable performance supported by improved margins and a continued cost focus,” said ADNOC Distribution Deputy CEO John Carey.
“We have seen good momentum across our businesses, led by a 39 percent increase in EBITDA in our retail segment and a 5 percent increase in volumes sold by our corporate sales segment in the first half of 2018.”