Adnoc Distribution net profit jumps 6.6% to $157mn in Q1

Abu Dhabi / Emirates Business

Adnoc Distribution, the UAE’s largest fuel and convenience retailer and a company listed on Abu Dhabi Securities Exchange (ADX), on Wednesday reported that its first quarter 2019 net profit increased by 6.6% to AED 578 million ($157 million) when compared with the same period last year.
Excluding inventory gains recorded in Q1 2018, the 2019 first quarter’s underlying EBITDA grew by 16.5% compared to Q1 2018 to AED 733 million. Q1 2019 free cash flow (EBITDA minus capital expenditures) generation grew by 24.9% year-on-year to AED 687 million. Profitability has also shown continued momentum, with Q1 2019 EBITDA margin reaching 15.4%, up from 13.6% in Q1 2018.
Adnoc Distribution recorded Q1 2019 earnings per share of AED 0.046 up by 29.6% compared to Q4 2018 and by 6.6% year-on-year. Moreover, Adnoc Distribution continues to maintain a low net debt to EBITDA ratio of 0.35x at March 31, this year.
During Q1 2019, Adnoc Distribution’s UAE network reached 379 retail fuel stations, with the addition of three new stations during Q1 2019. The company’s convenience store network reached 252, including 14 Géant Express convenience stores, as of March 31. Q1 2019 non-fuel gross profit increased by 9.2% compared to Q1 2018. Our convenience store revitalisation program, which offers customers an improved shopping experience, is on track and is contributing to improvements in gross margins and uplift in average basket size by 13.2% in Q1 2019 compared to Q1 2018.
Commenting on the results, Adnoc Distribution’s Acting CEO, Saeed Mubarak Al Rashdi, said: “Thanks to an unwavering focus on our customers and the resilience of our business model, we are off to a solid start in 2019. Our first quarter results confirm our ambition to sustain strong financial performance through operational excellence and premium customer service. 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.”
“We remain focused on accelerating our growth plans in 2019. In response to strong international investor interest, Adnoc Distribution will host its first-ever Capital Markets Days in London and New York in early May. We are pleased that the market recognizes our ability to deliver on our IPO commitments and our potential for future growth”, Al Rashdi added.
During the company’s general assembly meeting held on April 4, Adnoc Distribution announced an enhanced dividend policy, reflecting its Board of Director’s confidence in the company and its commitment to reward shareholders for their trust in the company. The new progressive dividend policy represents an increase of 63% for 2019 (AED 2,388 million) and 75% for 2020 (AED 2,571 million) compared to 2018, resulting in a 7.3% dividend yield for 2019 (based on yesterday’s closing share price of AED 2.60 per share).