Adnoc Distribution plans to focus on growing its domestic network expansion in second half of 2019, particularly in Dubai
Adnoc Distribution, the UAE’s largest fuel and convenience retailer, announced a 2.2 percent increase in Q2 profits to $162 million (AED595m).
The fuel distribution arm of Abu Dhabi National Oil Company attributed the positive results to improved cost efficiencies and the convenience store revitalisation programme, which has seen a 6.8 percent increase in average basket size in the first half of 2019 compared to the same period in 2018.
Overall, non-fuel retail gross profit increased by 10 percent in H1 2019.
Adnoc Distribution currently has 379 retail fuel service stations with two additional stations in Dubai under commissioning.
The company remains on track to open 20 to 30 new stations across the UAE this year, with a particular focus on expansion in Dubai.
While the UAE network of convenience stores has reached 262, with 12 new stores opened across the UAE already this year – 10 of which were opened in Q2 at existing retail sites. The company also has 14 Géant Express convenience stores, and 12 Oasis Cafés.
Saeed Mubarak Al Rashdi, acting CEO of Adnoc Distribution, said: “During the remainder of 2019 we are focused on the acceleration of our domestic network expansion, particularly in Dubai, and the growth of our non-fuel business to provide a superior experience to our customers.”
Adnoc Distribution reported a 4.3 percent increase in net profit for the half year period, to $319 million (AED1.173 billion), compared with the same period last year.
This is despite overall fuel sales volumes declining in H1 2019 by 1.7 percent, driven by a 3.5 percent decrease in fuel retail volumes, “mainly due to increased competition and the impact of the longer public holiday in Q2 2019 compared to the same period last year,” the company reported.
Al Rashdi added: “Our priorities remain growth and shareholder returns underpinned by our progressive dividend policy. As previously announced, we intend to boost top-line growth in both our fuel and non-fuel businesses, and have targeted in excess of $999m (AED3.67bn) of EBITDA by 2023.”
In April, ADNOC Distribution announced a new dividend policy, representing an increase of 63 percent in the annual dividend for 2019 ($626m, AED2.39bn) and 75 percent for 2020 ($699m, AED2.57bn) compared to 2018.
The company expects to pay the interim dividend of 2019 in October of this year, subject to board approval.