ADNOC Distribution reported its first quarter 2021 financial results, recording an underlying EBITDA of AED 740 million with Net Profit of AED 631 million for the quarter, while cash flow generation remained strong with free cash flow of AED 835 million.
In Q1 2021 ADNOC Distribution became the first fuel retailer globally to ensure 100% vaccination of its frontline employees, with more than 10,000 staff now having chosen to take their first dose.
In the first quarter of 2021, ADNOC Distribution delivered a strong financial performance, with EBITDA of AED 817 million, and Net Profit of AED 631 million, driven by an improvement in margins, and OPEX efficiencies made in the quarter.
The Company’s retail fuel business posted strong operational performance, with retail fuel gross profit growing by 12.6 percent year-on-year in the first quarter, led by higher margins.
As part of the company’s ongoing transformation, it remains committed to reducing operating costs and ensuring continued competitiveness in the UAE fuel retail sector. Throughout the first quarter of 2021, ADNOC Distribution’s operational expenditure (excluding depreciation) decreased by 6.5 percent compared to the same quarter last year as part of the company’s drive to enhance operational efficiencies. Reduction in operating costs were achieved despite growth in the company’s retail network and were driven by management initiatives to optimise OPEX across business units.
ADNOC Distribution maintains a strong financial position, with a robust balance sheet at the end of the first quarter of 2021. The Company remains well positioned to expand both its domestic and international portfolio in-line with its smart growth strategy. As of 31 March 2021, the company’s liquidity was at AED 5.1 billion in the form of AED 2.3 billion in cash and cash equivalents and AED 2.8 billion in unutilised credit facility.
Positioned for growth
During the first quarter of 2021, ADNOC Distribution continued to deliver on its smart growth strategy, to bring modern, digitally-enabled fuel retail convenience to customers and communities domestically and internationally, with the opening four new stations in the UAE. The company intends to accelerate delivery momentum and remains on track to meet its guidance to open total of 70 to 80 new stations across the UAE and KSA by year end, of which 30-35 are expected to be opened in the UAE. Of the four new stations opened in the UAE, two were ‘ADNOC On the go’ neighborhood stations, designed to provide increased customer convenience and meet the needs of previously underserved locations.
Ahmed Al Shamsi, Acting Chief Executive Officer of ADNOC Distribution said: “Throughout the first quarter of 2021, we made a significant achievement through the vaccination of 100% of our frontline employees, and I am extremely proud of their dedication to always upholding the highest standards of HSE.
“In addition, we have continued to build on our success in 2020, to record a strong financial performance. This has provided the Company with ample liquidity to pursue future growth opportunities, be they organic or inorganic in domestic and international markets.”
Al Shamsi added: “Our strength is only possible due to the continued dedication of all our employees, and we are grateful to our frontline colleagues, who play a vital role in ensuring the continued provision of services to our customers. We have progressed our smart growth strategy in the first quarter and have ambitious targets for 2021, including the opening of 70 to 80 new stations across domestic and international markets. Our focus on creating shareholder value continued in the first quarter of 2021 and we remain committed to providing strong dividend visibility.”