ADNOC

ADNOC Distribution net profit increases by 4.3% to AED 1.17 billion in first half of 2019

In April, Company announced new dividend policy of AED 2.39 billion for 2019. It expects to pay the first half as interim dividend in October.

04 August 2019

Abu Dhabi, UAE – August 4, 2019: ADNOC Distribution (ISIN: AEA006101017) (Symbol: ADNOCDIST), the UAE’s largest fuel and convenience retailer and listed on the Abu Dhabi Securities Exchange (ADX), today reported that its first half 2019 net profit increased by 4.3%, to AED 1.173 billion, compared with the same period last year. Free cash flow (EBITDA minus capital expenditures) generation was up 21% year-on-year to AED 1.345 billion in the first half of 2019. For the second quarter of 2019, EBITDA was AED 750 million and net profit was AED 595 million, up 1.3% and 2.2%, respectively, compared to the second quarter of 2018.

Excluding inventory gains, underlying EBITDA for the first half of 2019 grew by 11% compared to the first half of 2018, to AED 1.364 billion, driven by improved cost efficiencies and the positive results of the company’s convenience store revitalization program. The revitalization program, which offers customers an improved shopping experience, is on track and is contributing to improvements in gross margins and an uplift in average basket size by 6.8% in the first half of 2019 compared to the first half of 2018. Non-fuel retail gross profit increased by 10% in the first half of 2019 compared to the first half of 2018. The company’s EBITDA margin has also shown continued momentum, reaching 14.4% in the first half of 2019, up from 13.2% during the same period last year.

Commenting on the results, ADNOC Distribution’s Acting CEO, Saeed Mubarak Al Rashdi, said: “Thanks to an unwavering focus on our customers, the strength of our business model, and the successful execution of our strategic initiatives, we have once again delivered solid results in the first half of 2019. 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”.

“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 AED 3.67 billion of EBITDA by 2023.”

“ADNOC Distribution has once again demonstrated its ability to realize profitable long-term growth, driven by greater fuel offerings and service, an enhanced convenience store experience and improved quality of service. We are well on our way to making ADNOC Distribution a world-class fuel and convenience retailer and look forward to continuing our journey in the UAE and beyond”, Al Rashdi added.

In April 2019, ADNOC Distribution announced a new dividend policy, representing an increase of 63% in the annual dividend for 2019 (AED 2.39 billion) and 75% for 2020 (AED 2.57 billion) compared to 2018. The company expects to pay the interim dividend of 2019 in October of this year, subject to board approval.

 

Key Financial Metrics

AED millions

Q2-19     

Q2-18    

change    

H1-19    

H1-18    

change   

 

2018

Revenue

5,504

5,808

-5.2%

10,274

10,967

-6.3%

 

22,893

Gross profit

1,332

1,424

-6.5%

2,478

2,609

-5.0%

 

5,069

EBITDA

750

740

1.3%

1,483

1,443

2.8%

 

2,774

Operating profit

622

613

1.5%

1,227

1,191

3.0%

 

2,242

Profit for the period

595

582

2.2%

1,173

1,124

4.3%

 

2,128

Earnings per share (AED/share)

0.048

0.047

2.2%

0.094

0.090

4.3%

 

0.170

Capital expenditures

92

179

-48.7%

138

332

-58.4%

 

772

Free cash flow

658

561

17.3%

1,345

1,111

21.0%

 

2,002

Net cash generated from operating activities

1,872

1,149

62.9%

973

3,278

-70.3%

 

4,914

 

The full second quarter and first half 2019 earnings announcement can be found at https://www.adnocdistribution.ae/en/investor-relations/investor-relations/