Shareholders of ADNOC Distribution, the UAE’s largest fuel and convenience retailer, approved a $200mn dividend payment, at the company’s landmark first Annual General Meeting (AGM).
The dividend was approved following a report of the company’s performance, which highlighted the significant achievements the company made in 2017 and comes after ADNOC Distribution’s successful listing on the Abu Dhabi Securities Exchange (ADX) in December last year.
Dr Sultan Ahmed Al Jaber, ADNOC Distribution board chairman, said: “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.”
“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 payout ratio we announced last November puts us near the top of major listed companies in the region, and we are determined to reward you, our shareholders, for believing and trusting in us.”
“In the lead up to our IPO, ADNOC Distribution’s management team outlined a clear growth strategy, centred on offering more choice, service and convenience for fuel and non-fuel customers while also being more cost efficient. I am proud to say that we are ahead of schedule and we are delivering on the commitments that we made,” Dr Al Jaber added.
ADNOC Distribution highlights from 2017, and recent announcements since its IPO, include: (i) Completion and opening of 24 new stations in the UAE in 2017. The company has announced plans to open 13 new stations in 2018, including for the first time in Dubai, where construction has started on three stations. (ii) Announcement of ADNOC Flex, a new approach to fuel services where customers have the choice of where and how they re-fuel. (iii) Landmark agreement with the world famous retail brand Géant to rebrand and change the product selection, layout and supply chain at 10 existing convenience stores. This is just one example of broader initiatives underway to improve the convenience store platform. (iv) Cost efficiency measures with both operating and capital expenditure. For example, capital expenditure on new stations from 2019 will be reduced by as much as 40% without impacting on safety, the customer experience or the ADNOC brand. (v) Transformation of the structure and culture of ADNOC Distribution to ensure it is more performance driven and customer focused.
“ADNOC Distribution must continue to be more customer-centric,” Dr Al Jaber commented. “If we maintain a sharp focus on our customers, I am confident that our financial performance will improve even further. At the same time, the company’s management must continue driving ahead with its growth strategy while also changing the company’s culture so that every employee is more performance driven and even more customer focused.”
“As a 90% shareholder, ADNOC is fully committed to the success of ADNOC Distribution and we will continue to leverage all resources at our disposal to ensure its continued success and growth.”
Commenting on ADNOC Distribution’s growth strategy, acting CEO Saeed Mubarak Al Rashdi said the company’s management is focused on continuing to deliver against its commitments.
“Our growth strategy is very clear and we are ahead of schedule. By providing more choice to our fuel customers through ADNOC Flex, by improving our convenience store offering, partly through agreements with famous brands like Géant, and finally by being more cost efficient, I am confident that we will continue to see revenue and margin growth,” Al Rashdi said.
“In addition to our growth strategy, we are rapidly transforming our internal structures, processes and culture to ensure that we harness all of our employees to drive high performance and sustainable growth in the future.”
During the AGM, ADNOC Distribution shareholders approved the report of the company's auditors for the financial year ending 31 December 2017, as well as the financial statements for the same period. The meeting also re-appointed Deloitte & Touche (M.E.) as ADNOC Distribution auditors.