ADNOC Distribution reports $579.44mn in net profit in 2018, reflects 18% jump over 2017

ADNOC Distribution reports $579.44mn in net profit in 2018, reflects 18% jump over 2017
Published: 17 February 2019 - 1 a.m.
By: Martin Menachery

ADNOC Distribution reported that its 2018 net profit increased by 18% to $579.44mn, and EBITDA grew by 22% to $755.34mn. Free cash-flow (EBITDA minus capital expenditures) generation grew 32% year-on-year to $545.13mn in 2018, compared to 2017 adjusted free cash flow.

Profitability has also shown continued momentum, with 2018 EBITDA margin reaching 12.1%, up from 11.5% in 2017. The 2018 earnings per share grew to $0.046, an increase of 18% year-on-year. Net cash generated from operating activities increased by 45% to $1,338.05mn, compared to 2017, driven by strong cash flow from operations and proactive working capital management.

During the year 2018, ADNOC Distribution became the first fuel retailer in the UAE to service all seven emirates. ADNOC Distribution operates 376 retail fuel stations, 250 ADNOC Oasis convenience stores and 13 Géant Express convenience stores as of 31 December 2018 and is the leading marketer and distributor of fuels to commercial, industrial and government customers throughout the UAE.

ADNOC Distribution is the only fuel retailer operating in all seven emirates in the UAE, and in 2018 expanded its operations internationally, opening its first two service stations in the Kingdom of Saudi Arabia.

Commenting on the results, ADNOC Distribution’s acting CEO, Saeed Mubarak Al Rashdi, said: “Our 2018 results confirm our ambition to deliver and sustain strong financial performance through operational excellence and premium customer service. We generated positive momentum, driven by greater fuel offerings and service, an enhanced convenience store experience and improved quality of service.”

“We have delivered on our business plan commitments for 2018 and remain focused on volume growth initiatives with accelerated UAE and international expansion plans. We are well on our way to make ADNOC Distribution a world-class fuel and convenience retailer.”

ADNOC Distribution’s recent local expansion presents an opportunity to demonstrate to customers great service levels and a wide range of products, which are now available across the nation. This is the beginning of a journey, with further expansion to come inside the UAE and internationally in 2019.

While the company continues to strengthen its competitive position, ADNOC Distribution remains committed to its shareholders by pursuing its ambition to transform into a more performance-driven and commercially minded business through a disciplined, return-driven capital allocation strategy.

As witnessed in the third quarter of 2018, ADNOC Distribution’s convenience stores continued to generate higher revenues, resulting from increased footfall and higher rates of conversion from fuel purchases to convenience purchases in the fourth quarter compared to the third quarter of 2018.

This was driven by management initiatives to improve the customer experience, including a more focused store revitalisation programme and the implementation of Premium Rewards, which offers rewards to premium service customers that may be redeemed in the company’s convenience stores.

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