UAE’s ADNOC Distribution reported robust financial performance throughout 2020 that saw its net profit for the fourth quarter of 2020 grow to AED 851 million and for 2020, net profit increased to AED 2.4 billion, despite continued market uncertainty caused by the COVID-19 pandemic.
ADNOC Distribution has maintained a strong balance sheet as of 31 December 2020, and remains well-positioned to expand both its domestic and international portfolio in-line with its smart growth strategy, as well as meet its dividend commitments. As of 31 December 2020, the company’s liquidity was at AED 5.6 billion in the form of AED 2.8 billion in cash and cash equivalents and AED 2.8 billion in unutilized credit facilities.
Following a 24 percent quarter-on-quarter increase in total fuel volumes in Q3 2020, volumes for the fourth quarter of 2020 increased 2 percent compared to the third quarter of 2020.
Ahmed Al Shamsi, Acting Chief Executive Officer of ADNOC Distribution said: “I am pleased to announce ADNOC Distribution’s robust fourth quarter and full year performance. Through our employees’ continued dedication to ensuring customer safety and convenience, we have delivered a strong performance, despite challenging market conditions.
“We set ambitious growth targets for 2020 and it is testament to our resilient business model that we not only met,but exceeded guidance in terms of both new station openings and convenience store refurbishments.
Throughout 2020, the Company accelerated the delivery of its strategic smart growth plans, whilst maintaining rigorous compliance to government guidelines and upholding the highest standards of health and safety.
During the year, ADNOC Distribution opened 64 new stations, ahead of its guidance to the market of 50-60 new stations; a rate of delivery ten times that of 2019.
There was a significant increase in ADNOC Distribution’s network in Dubai in 2020, with 20 new service stations opened in the emirate.
The company also added a sizeable number of new ‘ADNOC On the Go’ stations, which are modular in form and provide neighbourhoods and communities with access to fuel and retail in locations where traditional stations would be impractical. A total of 38 were opened in 2020 across the country.
In addition to its growth in the UAE, international expansion was accelerated with the announcement that the Company had signed a definitive agreement on 30 December 2020, to acquire 15 service stations in the Kingdom of Saudi Arabia, reaffirming its commitment to expansion in the Kingdom, and the region. The acquisition is subject to certain conditions (including obtaining regulatory approvals) and stems from ADNOC Distribution’s long-term smart growth strategy.
The stations are located in the eastern region of KSA, with sites dedicated to both highway commuters and in-community convenience.
This transaction has been quickly followed by the announcement today of the execution of two further definitive agreements to acquire a total of 20 stations in KSA, which transactions are subject to certain conditions (including obtaining regulatory approvals). The two transactions consist of 20 service stations in the Eastern, Central and Riyadh Provinces of KSA with a total purchase consideration of up to AED 56.9 million (USD 15.5 million). The new transactions will bring the company’s total network to 37 stations.
Al Shamsi added: “ADNOC Distribution is well placed to continue building on recent success, in the UAE and beyond, in the year ahead and remains on track to reach EBITDA target of at least USD 1.0 billion by 2023. During Q4 2020, we announced the start of our further expansion into the Kingdom of Saudi Arabia with an agreement to acquire 15 service stations, two further agreements to acquire an additional 20 stations were announced this month. These are important milestones for our company as we expand outside of the UAE and a key element of our profitable growth strategy too. We will continue to seek further international expansion opportunities and unlock incremental value for shareholders.”