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Abu Dhabi, May 12 / ADNOC Distribution today announced its financial results for the first quarter of 2023, achieving a strong performance and an increase in net profit, excluding inventory changes, by 5.5% on an annual basis and by 19.4% on a quarterly basis, to reach 551 million dirhams paid. Strong performance and procedures to enhance the efficiency of operations in all sectors of the company.
ADNOC Distribution maintained a strong balance sheet during the first quarter of the year, with free cash flow of AED 1.04 billion. ADNOC Distribution witnessed an 8% year-on-year increase in the total quantities of fuel sold in both the UAE and Saudi Arabia during the first quarter of 2023, driven by the continued economic recovery and expansion of the company’s network of stations across the country. Total volumes of retail fuel sales – which represent about 65% of the total volumes of fuel sold – increased by 5.5% on an annual basis. In addition, corporate fuel sales volumes witnessed a strong growth of 21% year-on-year compared to the same period in 2022, mainly driven by the company’s efforts to enhance its business portfolio through business development programs and customer relationship management.
Engineer Badr Saeed Al Lamki, CEO of ADNOC Distribution, said: “Our efforts during the first quarter of 2023 focused on improving our operations across our network both locally and internationally while ensuring that our cross-border teams are well equipped to sustain our growth pace in 2023 and beyond. We have also maintained At the same time, we are able to generate strong cash flows, and have strengthened our financial position in order to create additional value for shareholders through efficient capital allocation.” Al-Lamki added: “We are working to enhance the growth of our business locally and internationally by exploring merger and acquisition opportunities of cumulative value, taking into account profitability and finding new sources of revenue to be among the main factors in the company’s decision-making process.
The growth of the non-fuel retail business continued during the first quarter of 2023 as the number of transactions recorded increased by 11% year-on-year, and the total profit of the non-fuel retail business increased by 9% year-on-year, driven by a series of roadshows and initiatives focused on customers as part of the company’s strategy to strengthen its non-fuel retail business. This included improving the customer shopping experience through the use of artificial intelligence and data analysis techniques to provide suitable offers to customers through the ADNOC Rewards program, as well as modernizing retail spaces in the entire network of service stations through the ADNOC Oasis store renovation program. Initiatives to link the ADNOC Rewards program to all purchases made at service stations and to provide customers with the opportunity to earn points and exchange them for many valuable offers – including refueling, oil change services, car washes and retail stores – also contributed to the growth. The company maintained its leading position in the UAE in the retail store operation sector, as it operates 345 retail stores, as of March 31, 2023.
ADNOC Distribution continued to expand its presence locally by opening six new service stations during the first quarter of the year, thus reinforcing its leading position nationwide in the fuel distribution sector, as it operates 507 service stations across the country, as of March 31, 2023. ADNOC Distribution is committed to its plans to To the opening of 25-35 new stations during this year. The company also strengthened its international presence by completing in February 2023 the acquisition of a 50% stake in the business of Total Energy Marketing Egypt W.L.L., which is one of the four largest fuel retail companies in Egypt. The partnership includes a diversified business portfolio that includes 240 retail fuel stations, more than 100 retail stores, more than 250 oil change stations, car wash centers, wholesale fuel, jet fuel and lubricants operations. Total Energies Marketing Egypt has successfully expanded its jet fuel business by acquiring the concession to refuel Etihad Airways aircraft in Cairo. ADNOC Distribution plans to open its first branded service station in Cairo during the second quarter of 2023.
During the first quarter of 2023, ADNOC Distribution invested a total of AED 158 million in organic capital expenditures, while maintaining a strong balance sheet with a net debt-to-EBITDA ratio of 1.06 times. It is expected that the company will continue its pace of growth during the year 2023, as it aims to enhance its expansion plans by investing between 918 and 1,100 million dirhams.
ADNOC Distribution expects to continue the growth momentum of fuel quantities during 2023 while also continuing its efforts to expand its network of stations, and is also working to enhance the contribution of the non-fuel retail business.
The company achieved additional savings in operational costs amounting to 33 million dirhams during the first quarter, and is proceeding steadily in accordance with its trend towards achieving additional savings in operating expenses on a similar basis, with a total value exceeding 92 million dirhams in 2023, by launching administrative initiatives aimed at improving efficiency. operations for all sectors of the company and rationalize spending.
As part of its endeavor to enhance the continuity of its business in keeping with the future, ADNOC Distribution continues to explore potential growth opportunities and new sources of revenue, which are offered by the transformation of the energy sector, including new mobility solutions such as electric vehicle charging with a focus on sustainability initiatives. The company strengthened its leading position by launching the “ADNOC Full & Go” service, becoming the first fuel distributor in the region to introduce this innovative technology at service stations. This AI-powered service uses the latest innovations
