• Fuel volumes see continued recovery throughout 2021, following an economic upturn alongside easing of travel restrictions
• UAE network reaches 462 service station and 346 c-stores, reaffirming Company’s position as the UAE’s largest fuel and convenience retailer
• Continued progress on international expansion with 40 service stations now operational in Saudi Arabia since its entry to the market in 2018
• The Board recommends dividend of AED 1.285 billion (10.285 fils per share) for the second half of 2021, taking full-year 2021 dividend to AED 2.57 billion (20.57 fils per share)
Abu Dhabi, UAE – 11 February 2022: ADNOC Distribution (ISIN: AEA006101017) (Symbol: ADNOCDIST), the UAE’s largest fuel and convenience retailer, which is listed on the Abu Dhabi Securities Exchange (ADX), today reported that its EBITDA stood at AED 3.1 billion, with net profit of AED 2.2 billion for the full year 2021. For the fourth quarter of 2021, EBITDA was AED 802 million, while net profit stood at AED 571 million.
Resilient financial performance and strong balance sheet
The company delivered a resilient financial performance throughout 2021, despite volatility caused by the COVID-19 pandemic. ADNOC Distribution has maintained a strong balance sheet as of 31 December 2021, and remains well-positioned to continue expanding both its domestic and international portfolio in line with its smart growth strategy.
As of 31 December 2021, the company’s liquidity stood at AED 5.0 billion in the form of AED 2.3 billion in cash and cash equivalents and AED 2.8 billion in unutilized credit facilities.
ADNOC Distribution’s commercial business continued to implement a proactive sales strategy throughout 2021, including increased international expansion of its ADNOC Voyager lubricants to new markets. New distributors added in the third and fourth quarters in Angola and the Democratic Republic of Congo, has now expanded the company’s global footprint across a total of 19 markets and contributed to an improvement in the commercial business gross profit compared to 2020.
Business resilience and commitment to smart growth
ADNOC Distribution saw quarter-on-quarter growth in total fuel volumes in 2021, with an increase of 4% in the fourth quarter compared to the third. In addition, ADNOC Distribution has continued to see incremental volumes from its Dubai stations, with a total of 31 stations now in operation in the emirate.
ADNOC Distribution remains committed to its smart growth strategy to deliver modern, digitally-enabled fuel retail convenience to customers and communities across the UAE, with the opening of 19 new stations in 2021, reaffirming its position as the nation’s leading fuel retailer with a total network of 462 service stations and 346 convenience stores nationwide as of 31 December 2021.
The company also continues to deliver on its international growth plans with 38 stations operationalized in Saudi Arabia in 2021, bringing the company’s total network to 40 in the Kingdom. The company remains committed to bringing modern fuel and retail convenience to customers and communities across the Kingdom, and continues to evaluate international growth opportunities.
Locally, ADNOC Distribution signed a number of strategic agreements. An exclusive partnership agreement with Cars Taxi will see the provision of fuel and ADNOC Voyager lubricants, including the premium range Voyager Gold 5W-40 SN, to the company’s 3,000+ taxi fleet in the UAE.
An enhanced customer experience and commitment to safety
In February 2021, the company became the first fuel retailer globally to ensure that 100% of its frontline staff were fully vaccinated against COVID-19, as part of its commitment to ensuring the safety of customers and staff throughout its service station network. This was followed in October 2021 with all frontline service station staff receiving their COVID-19 booster vaccine shot.
ADNOC Distribution continued to invest in enhancing customer experience throughout 2021. This was underpinned by the ongoing convenience store refurbishment program, which was launched in 2019 and has seen the successful upgrade of 150 stores nationwide by the end of 2021.The new-look ADNOC Oasis stores offer fresh food, barista-brewed coffee and a wider menu selection. This has contributed to an increase in gross profit from non-fuel activities by 18% compared to 2020.
This also included the launching of the next generation retail experience, the new, fully autonomous, contactless and cashier-less ADNOC Oasis store. Through cutting-edge AI technology, weight-sensored shelves and advanced payment options, consumers can shop and pay without the need for a cashier or check out.
The ADNOC Reward program continued to grow its network in 2021, increasing the number of ADNOC Rewards members to more than 1.2 million by the end of 2021. With a total of 67 external partners, offering ADNOC Rewards members the maximum value there were more than 100 related offers. Average transaction values for Rewards members, compared to non-members was 25% higher, showing the value of the program. The company also continued to offer customers exclusive deals through Rewards , including in-store promotions and campaigns such as the successful ‘Let’s Go Shop and Win’ summer raffle, ‘50 Days of Rewards’ in celebration the UAE’s golden jubilee, and multiple activations surrounding the Abu Dhabi Grand Prix.
In December 2021, ADNOC Distribution announced expanding its LPG delivery service in Abu Dhabi with the addition of 30 new trucks to its existing fleet of 17, supporting door-to-door delivery of LPG cylinders to customers within an hour of ordering and utilizing the digital offering through the ADNOC Distribution app.
Attractive shareholder proposition
Following ADNOC Distribution’s inclusion in MSCI Emerging Markets Index in May 2021, the company was also included in the FTSE Emerging Markets (EM) Index in September 2021. The inclusion in these reputable indices helps to increase the attractiveness of ADNOC Distribution’s shares to potential international investors and thus further diversify the company’s investor base.
ADNOC Distribution remains committed to deliver profitable growth and attractive shareholder returns. In line with its approved dividend policy, the company’s Board of Directors has proposed a cash dividend of AED 1.285 billion (10.285 fils per share), equivalent to $ 350 million, for the second half of 2021, which will be submitted to the Company’s shareholders for approval at the Annual General Assembly Meeting scheduled for 2022. Subject to shareholders’ approval, total dividend for fiscal year 2021 is expected to be AED 2.57 billion (20.57 fils per share).
This would translate to a 5.0% annual dividend yield for 2021 (based on a share price of AED 4.12 as of 11th February 2022). The company paid half of the 2021 dividend in October of last year and expects to pay the final payment in April 2022, subject to shareholders’ approval.
During its General Assembly meeting in March 2021, the company announced an amendment to its dividend policy for 2022, setting a minimum of AED 2.57 billion dividend for 2022 (compared to minimum 75% of distributable profits as per previous policy), providing visible payback to shareholders until April 2023. The dividend policy for the years thereafter remains unchanged at a dividend equal to at least 75% of distributable profits.
The dividend policy recognizes the company’s strong financial position and confidence in its growth prospects and cash-flow generation ability going forward. ADNOC Distribution remains steadfast in the delivery of its strategic commitments and sustainable returns for its shareholders.
Engineer Bader Saeed Al Lamki, Chief Executive Officer, ADNOC Distribution said: “As we continued to work as a nation towards new growth and remained united in our vigilance in the fight against COVID-19, 2021 was a strong year of achievements for ADNOC Distribution. We maintain a robust balance sheet and expect to continue to deliver strong financial performance in the future. This is supported by our ongoing commitment to achieving the highest levels of efficiency, which has become a primary performance indicator across all operations and is now engraved in our company culture. We also continue our transformative journey as a fresh, modern, digitally-centric retail company, providing enhanced customer experiences across the UAE and beyond.
“The attractive value proposition that we offer to our shareholders is further heighted with our dividend policy, which I believe is testament to the confidence we are placing in our ability to deliver on our growth strategy.”
Commitment to sustainable growth
The company has continued to show its commitment to effectively managing environmental, social and governance (ESG) matters. In the third quarter of 2021, ADNOC Distribution received a rating of A in the MSCI ESG Ratings assessment, recognizing ADNOC Distribution’s approach to managing its business for long term sustainability.
“We strive to deliver strong operational and financial results by adopting world-class business operations and innovation measures to ensure running our operations in accordance with global best practices to deliver the highest value to our customers and highest returns to our investors,” added Al Lamki.