ADNOC DISTRIBUTION SETS THE STAGE FOR DIVIDEND BONANZA
INVESTORS APPROVE MINIMUM THRESHOLD FOR PAYOUTS AT $700M OR 75% OF THE NET PROFIT
Adnoc Distribution has won shareholder approval for a new five-year dividend policy that will see the fuel retailer return $700 million or a minimum of 75 per cent of net profit, whichever is higher, to investors.
At the annual general meeting, shareholders also approved distributing Dh1.28 billion in dividends for the second-half of 2023, equivalent to 10.285 fils per share. This is to paid in April and will bring the total for 2023 to Dh2.57 billion, “yielding 5.6 per cent based on the share price of Dh3.66 on March 27”. In 2023, the company reported net profits of Dh2.63 billion.
Stellar record
Comparatively, investors last approved a similar final dividend payment of Dh1.28 billion, equivalent to 10.285 fils per share, for the second half of 2022, resulting in a total dividend of Dh2.57 billion (20.57 fils per share) for fiscal year 2022, with the company’s dividend policy set at a dividend equal to at least 75 per cent of distributable profits in the years thereafter.
“Adnoc Distribution has provided shareholders with a 90 per cent return on their investment since its IPO in 2017 through increased market value and dividends. And delivered on its promise of achieving $1 billion in EBITDA for 2023, setting the foundation for our next phase of accelerated growth,” said Dr Sultan Ahmad Al Jaber, chairman.
Growth trajectory
“Based on our confidence in the new strategy and future prospects, we have introduced a more rewarding five-year dividend policy that provides long-term payback visibility and dividend upside from future earnings growth. Our new policy mirrors the company’s sustainable growth trajectory and predictable cash flow while demonstrating attractive shareholder returns.”
The new plans include higher contribution from international operations in Saudi Arabia and Egypt while “exploring accretive growth opportunities”.
This will be “supported by a robust-balance sheet and strong cash flow generation”.
It will see the Adnoc entity work on “additional sectors such as lubricants and LPG, new sustainable transport solutions, and exploring expansion opportunities in new global markets”.
One-stop car care spot
Adnoc Distribution aims to become a one-stop destination for car care, intending to triple the number of car washes, double automotive oil changes, and broaden car service offerings.
“We aim to expand our network to 1,000 service stations by 2028, growing non-fuel transactions by 50 per cent and increasing convenience stores by 25 per cent,” said Bader Saeed Al Lamki, CEO.
EV chargers
“Additionally, we aim to strategically grow our electric vehicle infrastructure to more than 500 fast and superfast chargers by 2028, a 10-fold increase from 2023.” There is also a full-scale charging up for EVs and their owners too.
The company targets a ‘minimum’ of 500 EV fast and superfast charging points across its UAE-wide network, which would be a 10-fold increase over its 2023 tally. The EV initiative is in alliance with Taqa, the Abu Dhabi utility firm.
AI integration
The company leveraged AI and advanced technology to supercharge growth, improve customer experiences, and introduce new technology-led initiatives across its network. This includes Fill & Go, an AI-enabled licence plate recognition system that provides seamless refuelling for registered customers. Additionally, it launched the first real-world test of an AI-operated autonomous refuelling robotic arm.
AI and data have enabled the company to tailor hyperpersonalised consumer offers through Adnoc Rewards, the UAE’s largest fuel retail loyalty programme with nearly two million members.
We have introduced a more rewarding fiveyear dividend policy that provides longterm payback visibility and dividend upside from future earnings growth.”
Dr Sultan Ahmad Al Jaber | Chairman
Predicting fuel demand
The company also employs AI-predictive technology to improve its fuel distribution operations. Instead of relying solely on scheduled refuelling, the AI-driven refuelling process accurately predicts fuel demand at different service stations, significantly reducing instances of fuel shortages, thereby enhancing operational efficiency.
It also supports the Company’s decarbonisation and sustainability efforts by optimising fuel truck delivery, resulting in a 10 per cent reduction in carbon emissions.
Adnoc Distribution aims to become a one-stop destination for car care, intending to triple the number of car washes, double automotive oil changes, and broaden car service offerings.