Abu Dhabi National Oil Company‘s fuel and retail arm, ADNOC Distribution, has announced a 5.5% increase in net profit for Q1-2023, propelled by strong performance and operational efficiency measures. The fuel retailer generated a free cash flow of Dh1,048 million during the quarter.
ADNOC Distribution saw a growth of 8% YoY in total fuel volumes for the UAE and KSA during Q1-2023, driven by the continued rebound in economic activity and network expansion across the UAE. Retail fuel volumes, which account for 65% of sales, grew by 5.5% YoY.
Saeed Mubarak Al Rashdi, ADNOC Distribution’s acting CEO, attributed the strong performance to the company’s customer-centric approach and ongoing efforts to optimize the network of service stations. The company has been focusing on developing new, advanced fuels and lubricants, expanding its convenience store offerings, and modernizing its fuel stations to provide a more enhanced customer experience.
ADNOC Distribution is continuing to strengthen its operational efficiencies and expand its footprint across the UAE and KSA. The company is expanding its fuel station network, with a goal of having 1,200 stations by 2030. It has also launched several initiatives to reduce its carbon footprint and promote sustainable practices across its operations.
The fuel retailer has a diversified revenue base, with its non-fuel segment accounting for over 30% of its gross profit. ADNOC Distribution’s convenience store offerings have been a significant contributor to its non-fuel revenue growth, with the company expanding its retail offering to include fresh food and coffee.
ADNOC Distribution has been recognized for its excellence in operations, innovation, and customer service, winning several prestigious awards, including the Dubai Chamber of Commerce and Industry’s Mohammed bin Rashid Al Maktoum (MRM) Business Innovation Award in the energy category.
The fuel retailer also expanded its fuel station network during the quarter, adding 13 new stations in the UAE, taking the total to 447 service stations as of March 31, 2023. The company also announced plans to expand its service station network in Saudi Arabia, with the target of having up to 50 stations operating in the kingdom by 2025.
Commenting on the Q1-2023 results, ADNOC Distribution’s CEO Ahmed Al Shamsi said, “We are pleased to announce a solid set of financial and operational results for the first quarter of 2023, reflecting the continued progress in the delivery of our strategy. Our results are underpinned by strong operational efficiencies across our businesses and cost-saving measures that are delivering sustainable savings. Our growing network of service stations, coupled with our commitment to providing the highest quality products and services to our customers, has enabled us to deliver strong volume growth in the period.”
Al Shamsi also added that ADNOC Distribution’s focus on expanding its non-fuel business segments, such as convenience stores and car wash services, had contributed to the company’s overall performance in the first quarter. The company’s non-fuel retail revenue increased by 11.3 per cent year-on-year, driven by the addition of new stores and higher sales from existing stores.
The positive Q1-2023 results of ADNOC Distribution come at a time when global oil prices are experiencing a rebound, driven by increased demand as the global economy continues to recover from the impact of the COVID-19 pandemic. The company’s success also reflects the strategic efforts of Abu Dhabi National Oil Company to diversify its business portfolio and transform into a more integrated energy company.
The company’s shares have been performing well on the Abu Dhabi Securities Exchange, with its share price rising by over 10% since the start of the year. ADNOC Distribution’s strong Q1 results and ongoing initiatives to drive growth and innovation are expected to continue to attract investor interest in the company.
